CASH FROM OPERATING ACTIVITIES | |||||||||
Definition | |||||||||
This figure shows current (over the past year) net asset investments made by the business in order to keep it growing. | |||||||||
Calculation rule | |||||||||
Changes in current assets minus current liabilities vs. one year prior. | |||||||||
Comment | |||||||||
This measure is used in the calculation of free cash flow. Free Cash Flow = Operating cash flow - capital expenditure + changes in working capital. Free Cash Flow is used in Discounted Cash Flow calculations and also in some valuation multiples. | |||||||||
Reference | |||||||||
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