Homepage
PR Newswire
04-01-2015, 03:51 AM
Hi Experts,
Was doing some in-depth analysis and decided to do some DCF Valuations. I have a couple of what is probably basic accounting questions, but would really appreciate it if I could get some help.
1) I understand that Free Cash Flow = EBIT + Depreciation/Amortization - Changes in Working Capital - CAPEX
Do I also need to add back other items such as goodwill impairment? Since these are similar to depreciation in that they are just paper expenses?
2) Change in Working Capital
I was under the impression that Change in Working Capital is just Current Assets - Current Liabilities.
However, it seems that in the AR's Cash Flow statement, the "movement in working capital section" isn't so simple. What items in the Statement of Finance Current Assets/Current Liabilities tie back to the Cash Flow?
I hope my questions are clear. If not I can elaborate.
Was doing some in-depth analysis and decided to do some DCF Valuations. I have a couple of what is probably basic accounting questions, but would really appreciate it if I could get some help.
1) I understand that Free Cash Flow = EBIT + Depreciation/Amortization - Changes in Working Capital - CAPEX
Do I also need to add back other items such as goodwill impairment? Since these are similar to depreciation in that they are just paper expenses?
2) Change in Working Capital
I was under the impression that Change in Working Capital is just Current Assets - Current Liabilities.
However, it seems that in the AR's Cash Flow statement, the "movement in working capital section" isn't so simple. What items in the Statement of Finance Current Assets/Current Liabilities tie back to the Cash Flow?
I hope my questions are clear. If not I can elaborate.