Since I have a memory like a fish I wanted to know if there is a flaw in my below reasoning for memorizing both the FCFF and FCFE formulas: Can you just memorize the 4 FCFF formulas and just subtract out after tax interest expense and add net borrowing to each formula in order to get to FCFE or are there flaws to this methodology?
Thats how I did it. Not sure if there is a flaw but it seems sound
No flaws.
I have a ton of trouble with the S&P version of cash flow. Dont know why. The others, including the one from Corp Finance for M&A are fine. Anyone got a good trick for the FCF euation in the credit analysis?
NI +NCC =FFO +/- change WC =CFO +/- FCInv =FCF -Div =Discretionary CF +/- acquisitions, divestitures +/- other uses of cash =PFCF Honestly, the only one that’s an issue to remember is FCF, which is FCFF without after-tax interest added back. If you remember that one thing, then you’re good for that. I’m still having trouble with some of the ratios they use.