December 2025 ACCA Exams

Post comments & Instant poll

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March 2026 exams.
Get your discount code >>

Free Cash Flows

This topic has 1 reply, 2 voices, and was last updated 12 years ago by John Moffat.

Viewing 2 posts - 1 through 2 (of 2 total)

Author
Posts
October 25, 2013 at 4:36 pm #143687
babarali47
Member
- Topics: 16
- Replies: 23
Assalam walaikum. Peace be upon you. Sir, Why don’t we deduct interest while calculating Free Cash Flow to the Firm? Isn’t interest also an essential expenditure? Thank You. 🙂
October 25, 2013 at 5:04 pm #143694
John Moffat
Keymaster
- Topics: 57
- Replies: 54802
If it is free cash flow to equity, then we do subtract debt interest.
However, if it is just free cash flow then it means free cash flow available to all lenders – shareholders and debt lenders. So for that we do not subtract the interest.
Author
Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.