![]() ![]() Where NOPAT is net operating profit after taxes, and change in invested capital is the difference between the amount of invested capital at the end of the period and the amount of invested capital at the beginning of the period. The most precise appraisal can be given using the following approach: ![]() There are many approaches to calculate free cash flow depending on the required accuracy of the appraisal. ![]() It is a very useful metric for investors because it shows how much cash can be extracted from a business without damaging its operations. In other words, FCF can be defined as net operating profit after taxes (NOPAT) less change in net working capital and change in fixed assets. Free cash flow (FCF) is the amount of cash available to investors after assets investments are made.
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