FCF: any rule-of-thumbs to simplfy calculation?
I’ve been having a little trouble with DCF analysis specifically with free cash flow. Although I feel comfortable with the analysis, the formula, and methods, I always seem to miss or not include vital information when trying to implement it in an actual case.
For example, I was helping my friend with a Harvard Business Case and felt unconfident with the final result. After some research, I pinpointed my weakness to trouble with identifying data to include in calculate Free cash flow. When should I start with CFO? Should i use CFI as net investment? or start with operations after dep, adjust, and deduce only purchase of Property, Plant and Equiptment. There are so many different terminologies and each source online offers alternative way of calculating it. No straight method.
Do you guys have any rules-of-thumbs in calculating FCF, or techniques to simplfy the matter?
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