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Free cash flow to firm

This topic has 1 reply, 2 voices, and was last updated 6 years ago by John Moffat.

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June 7, 2018 at 1:13 pm #457463
adolf121
Member
- Topics: 19
- Replies: 39
hey John!!
Do we add the
1. Finance income net of tax
2.Dividends received from subsidiary net of tax
when we calculate the FCF to FIRM?
I know we do add the above for FCFequity but im not sure on FCFF.
Hope you can clear this out.
Since all the calculations mention Operating profit at the begining I’m not sure whether these come in for FCFF.
June 7, 2018 at 5:12 pm #457575
John Moffat
Keymaster
- Topics: 57
- Replies: 54500
Yes you would add both to get the free cash flow to the firm.
(The only difference when you do free cash flow to equity is that then you subtract interest paid and loans repaid)
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