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Hi Sir
I am confused with the components to be deducted to calculate Free Cash Flow to Equity…
The following are some components which i m not sure whether to deduct or ignore in deriving FCFE:
1) Acquisition and disposal i.e Proceeds from the sale of interest in joint ventures
2) Increase/decrease in short term deposits
3) CAPEXThank you !
Damon
Aoa. I only know that 2nd point that increase or decrease in short term investment has no impact it is treated as cash. And add in calculating total free cash flow and also free cash flow to equity.
Decrease in short term investment add in fcf bcz it become true cash. And increse in short term invstmnt also add in fcf bcz it is highly liquid.Yes – ignore increase/decrease in short term deposits, but include the others.
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