FIN+4414+-+Free+Cash+Flow+and+EVA+-+Chapter+3

FIN+4414+-+Free+Cash+Flow+and+EVA+-+Chapter+3 - Free Cash...

Info iconThis preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Free Cash Flow and EVA Free Cash Flow (All Investors) NOWC = Net Operating Working Capital NOWC = (All Non-Interest Paying Current Assets) - (Current Liabilities Not Paying Interest) NOWC = (Cash + AR + Inventory) - (AP + Accruals) Free Cash Flow (All Investors) GFA = Gross Fixed Assets NFA = Net Fixed Assets DEP = Depreciation for Year GFA = NFA + Accumulated DEP NFA = GFA - Accumulated DEP Free Cash Flow (All Investors) TOC = Total Operating Capital TOC = NOWC + NFA Free Cash Flow (All Investors) NIOC = Net Investment in Operating Capital NIOC = ∆ TOC (Over the Year – A Flow) NIOC = ∆ NOWC + ∆ NFA Free Cash Flow (All Investors) GIOC = Gross Investment in Operating Capital GIOC = NIOC + DEP GIOC = ∆ NOWC + ∆ NFA + DEP GIOC = ∆ NOWC + ∆ GFA Free Cash Flow (All Investors) EBIT = Earnings Before Interest and Taxes NOPAT = Net Operating Profit After Taxes NOPAT = EBIT (1-T) OCF = Operating Cash Flow Free Cash Flow (All Investors) FCF = Free Cash Flow FCF = OCF - GIOC FCF = OCF - ( ∆ NOWC + ∆ NFA + DEP) FCF = OCF - ∆ NOWC - ∆ GFA Free Cash Flow (All Investors) FCF = Free Cash Flow FCF = OCF - GIOC FCF = (NOPAT + DEP) - (NIOC + DEP) FCF = NOPAT - NIOC FC F = NOPAT - ∆ NOWC - ∆ NFA Example From Text Income Statement (In Millions) Income Statement 2007 2006 Sales (Net Revenues) $3,000.00 $2,850.00 Opearting Costs-$2,616.20-$2,497.00 EBITDA...
View Full Document

This note was uploaded on 07/13/2011 for the course FIN 4414 taught by Professor Staff during the Spring '08 term at University of Florida.

Page1 / 32

FIN+4414+-+Free+Cash+Flow+and+EVA+-+Chapter+3 - Free Cash...

This preview shows document pages 1 - 11. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online