Vogel june2014

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November 30, 2014 at 11:18 am #214700
lzyjzy
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When estimating FCFF for division B spinoff, depreciation is deducted from FCF to arrive at taxable profits. But depreciation is not added back subsequently even though it is not a cash flow – doesn’t this underestimate Vogel’s CF by the tax allowable depreciation amount?

Thanks!
November 30, 2014 at 3:21 pm #214759
John Moffat
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It is because the amount needed to maintain the assets (which is a cash flow) is assumed to be the same as the depreciation figure.
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