what are you doing to remember which ratio has what advantages and shortcomings? seems like there are 40 things to remember here.
when working capital investment is growing, how is CFO greater than EBITDA?
CFO = EBIT(1-t) - WCInv + Dep EBIT(1-t) = CFO + WCInc - Dep EBIT(1-t) + Dep = EBITDA(1-t) + Dep * t substitute CFO + WCInv - Dep + Dep = EBITDA(1-t) + Dep * t CFO + WCInv = EBITDA(1-t) + Dep * t CFO = EBITDA(1-t) + Dep * t - WCInv so if WCInv is large, then … hmm ok this doesnt seem to be going anywhere.