FREE CASH FLOW | |||||||||
Definition | |||||||||
Measure used in cash flow multiples, and in Discounted Cash Flow valuations, where expected future free cash flows are discounted to present day. | |||||||||
Calculation rule | |||||||||
Free cash flow = NOPLAT (net operating profit - EBIT - less adjusted tax) - increase in working capital - capital expenditure. | |||||||||
Reference | |||||||||
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