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Group MembersNeelam ChhipaSwati KamtheManju NaickerPrincy PhilipAshish Nimbalkar
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Introduction Measure of financial performance. A company is able to generate after laying out. Free cash flow is important. Without cash, its tough to develop new products. FCF is calculated as: EBIT(1-Tax Rate) + Depreciation & Amortization - Change in Net Working Capital - Capital Expenditure.
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Another way of calculating FCF. It is important to note that negative free cash flow. Company is making large investments. The strategy has the potential to pay off in the long run.
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Free Cash Flow For The Firm Measure of financial performance that expresses. Calculated as: FCFF = Operating cash flow- Expenses- Taxes- Change in NWC- Change in Investment.
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Free Cash Flow Per Share Measure of a companys financial flexibility A proxy for measuring changes in earnings per share. Calculated as:
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Free Cash Flow To Equity How much cash can be paid to the equity shareholders FCFE is often used Calculated as: FCFE = Net Income - Net Capital Expenditure - Change in Net Working Capital + New Debt - Debt Repayment
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Free Cash Flow Yield An overall return evaluation ratio of a stock. Expected to earn against its market price per share. Calculated as:
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Free Cash Flow To Sales Ratio that illustrates the percentage of free cash flow to the amount of sales Calculated as: Free Cash Flow To Sales = Free Cash Flow ------------------- * 100 co’s annual sales
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Unlevered Free Cash Flow Before interest payments are taken into account Calculated as: Unlevered Free Cash Flow = EBITDA - CAPEX - Working Capital – Taxes Between unlevered cash flow and leveraged cash flow Company is more likely to run into problems if revenue streams dry up.
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