FCFE valuation model Noncash charge issue in test

for example, I got confused by example 17 of readiiing 35, here no non cash charge is mentioned thus the FCFE is calculated as

EPS − Net FCInv per share – WCInv per share + Debt financing per share. Is it ok to say if non cash charge is not mentioned anywhere then we will not have to take care of it? why is it not calculated here

It is not explicitly given but it is hidden in “Net FCinv”. Right under the exhibit it says

“Capital investment (net of depreciation) equals 60 percent of the sales increase from the previous year”.

In general a company may have neither depreciation nor amortization (i.e. non cash charges) so it is possible to have FCFE with zero NCC. But if that company is a manufacturing company then it almost certainly has fixed assets, which implies depreciation expense.

ok, so net of depreciation here means they have no depreciation? otherwise arent we supposed to add it back?

They mean there is depreciation but it was already deducted from (netted with) capital investments.

Imagine FCinv=100, Depr=10, then net FCinv=90

Remember FCFE=NI +Depr-FCinv -WCinv+net borrowing

The bolded terms can be netted (one is minus the other is plus)

thats clear, thank you

Never saw that before… thanks krokodilizn.