CHAPTER 10- VALUATION PRINCIPLES

Saturday, 6 April 2024 8:56 PM

CHAPTER
10-…

Cash Flows Calculation

FCFF FCFE
Net Income Net Income Net Income
Approach Add: Interest Add: Net
Expense Borrowing
Add: Depreciation Add: Depreciation
Less: Capex Less: Capex
Less: Net Less: Net
Operating Working Operating Working
Capital Capital
FCFF FCFE
NOPAT NOPAT NOPAT
Approach Add: Depreciation Less: Interest
Less: Capex Expense
Less: Net Add: Net
Operating Working Borrowing
Capital Add: Depreciation
FCFF Less: Capex
Less: Net
Operating Working
Capital
FCFE
CFO Approach Cash Flow from Cash Flow from
Operating Activities Operating Activities
Less: Capex Less: Capex
Add: Interest Add: Net
Expense Borrowing
FCFF FCFE
Any NOPAT
Alternative Less: Stocks issued
method Add: Stock
buyback
Add: Change in
cash balance
FCFE