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    A Comparison of Each Cash Flow Metric

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    franka4100
    This document compares key cash flow metrics used for valuation: EBITDA, operating cash flow, free cash flow (FCF), and free cash flow to the firm (FCFF). It shows that each metric is derived from different financial statements and analyses, with FCFF providing the highest correlation to economic value but with the lowest simplicity. The metrics also differ in whether they include factors like taxes, capital expenditures, and changes in working capital.

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    A Comparison of Each Cash Flow Metric

    Uploaded by

    franka4100
    6 views1 page
    This document compares key cash flow metrics used for valuation: EBITDA, operating cash flow, free cash flow (FCF), and free cash flow to the firm (FCFF). It shows that each metric is derived from different financial statements and analyses, with FCFF providing the highest correlation to economic value but with the lowest simplicity. The metrics also differ in whether they include factors like taxes, capital expenditures, and changes in working capital.

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    Comparison of Cash Flow Metrics

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    This document compares key cash flow metrics used for valuation: EBITDA, operating cash flow, free cash flow (FCF), and free cash flow to the firm (FCFF). It shows that each metric is derived from different financial statements and analyses, with FCFF providing the highest correlation to economic value but with the lowest simplicity. The metrics also differ in whether they include factors like taxes, capital expenditures, and changes in working capital.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    6 views1 page

    A Comparison of Each Cash Flow Metric

    Uploaded by

    franka4100
    This document compares key cash flow metrics used for valuation: EBITDA, operating cash flow, free cash flow (FCF), and free cash flow to the firm (FCFF). It shows that each metric is derived from different financial statements and analyses, with FCFF providing the highest correlation to economic value but with the lowest simplicity. The metrics also differ in whether they include factors like taxes, capital expenditures, and changes in working capital.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 1

    A comparison of each cash flow metric (completing the CF guide)

    EBITDA Operating CF FCF FCFF

    Derived From Income statement Cash Flow Statement Cash Flow Statement Separate Analysis

    Used to determine EV Equity Equity EV

    Valuation type Comparable Company Comparable Company DCF DCF

    Correlation to Economic Value Low/Moderate High Higher Highest

    Simplicity High Moderate Low Lowest

    GAAP/IFRS metric No Yes No No

    Includes changes in working capital No Yes Yes Yes

    Includes taxes No Yes Yes Yes (re-calculated)

    Includes CapEx No No Yes Yes

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