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Hi there! Great question! In the second option for calculating Free Cash Flow to the Firm (FCFF), the term "interest(1-t)" is used to adjust for the tax shield benefits of having interest expenses. Hope this clarifies your doubt! Keep those questions coming! 👍
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Hi there! Great observation! Calculating the Free Cash Flow (FCF) for each shop in a chain can provide valuable insights into the performance of different locations. By analyzing each shop's FCF, you can identify which are the most profitable or may require improvements. If you want to gain insights from our industry experts, check out the details below. www.wallstreetmojo.com/all-courses/
you saved me, hero
Appreciate your feedback, more content coming soon!
Greetings ! What about profit / loss on sale of fixed assets?
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FCF = Operating Cash Flow - Net Fixed Assets Investment - Net Current Assets Investment
FCF = [{EBIT (1 - Tax Rate)} + Depriciations] - (Change in Fixed Assets + Depreciations) - NCAI
FCF = OCF - Change in Fixed Assets - Depreciations - NCAI
Is this formula correct? Please explain.
why interest(1-t) used in second option, as company will have to pay interest and that will reduce net cash
Hi there! Great question! In the second option for calculating Free Cash Flow to the Firm (FCFF), the term "interest(1-t)" is used to adjust for the tax shield benefits of having interest expenses.
Hope this clarifies your doubt! Keep those questions coming! 👍
isn't it minus change in working capital sir?
He calculated the (-) change in WC already, that's why he just added it
@@yuhzobreyer188 ni -ve hota hai dum*
How to estimate expected cash flow for dcf
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Dear Friends, In reality with the chain of shop, we can calculate the FCF for each shop and calculate FCF of the chain. How do you think?
Hi there! Great observation! Calculating the Free Cash Flow (FCF) for each shop in a chain can provide valuable insights into the performance of different locations. By analyzing each shop's FCF, you can identify which are the most profitable or may require improvements.
If you want to gain insights from our industry experts, check out the details below.
www.wallstreetmojo.com/all-courses/
Its minus capex for that year not changes in capex!!! Jesus, if you are going to teach this at least get it right!!!
No he just did right you have to minus changes in capex plus depreciation which is missing here