FCF (Free Cash Flow)


N's spirit Basic MBA > FCF (Free Cash Flow)

FCF (Free Cash Flow)

Free Cash Flow (FCF) is cash that the company can use freely. It is calculated as follows

FCF =
EBIT (Earnings before interests and Taxes)
+ Depreciation
- WC (Working Capital) increase
- CAPEX (Capital Expenditure)

FCF (Free Cash Flow)


By using cash flow statement, FCF can be calculated more simply as follows.

Operating Cash Flow - Investing Cash Flow


How to maximize FCF

Maximizing EBIT
Collecting cash generated by sales
Minimizing inventory
Minimizing Taxes
Saving investment cost


Then, in order to maximize FCF, the company needs to make products at minimum cost, sell them at maximum price, shorten the term of working capital and minimize tax pay.


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Finance
Principle of Finance
FCF (Free Cash Flow)
DCF (Discount Cash Flow)
WACC
Beta
Unlevered Beta
IRR
Terminal Value
Disadvantages of WACC
APV (Adjusted present value) Method
Making Portfolio and Diversification of Risk 1
Making Portfolio and Diversification of Risk 2
Return analysis by DCF 1
Return analysis by DCF 2
Important Indicator of DCF
Optimized Debt Equity Ratio
Tax Shield by Debt
Types of Debt
Policy of Dividend
Relationship between Policy of Dividend & Stock Price
Relationship between Own Shares Purchase & Stock Price
Investment to raise Stock Price
Bond
Coupon-Bearing Bond
Discount Bond
Bond with Warrant
Comparison of Yield Rate among Several Bonds
Securitization
Project Finance
M&A
Effect of M&A
Synergy Analysis
Financing in M&A
Process of Purchasing Stock Price in M&A
Types of Selling Business
Spinoff
Tracking Stock
Curve Out
LBO (Leveraged Buy Out)
MBO (Management Buy Out)
PPA (Purchase Price Allocation)
PMI (Post Merger Integration)


N's spirit Basic MBA > FCF (Free Cash Flow)

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