Could you please answer question as a short essay 4-6 sentences
Free cash is cash flow which is available for creditors and
debtors. It is calculated by subtracting increase in net working
capital and increase in fixed assets from operating cash flow.FCF
=Operating Cash Flow -Increase in NWC-Increase in Fixed Assets It
is important because it provides information about cash flow
expected for shareholders and lenders.
NOPAT is the net operating income after tax which focuses on income
from core operations. NOPAT is operating income multiplied by
(1-tax rate) .NOPAT =EBIT*(1-Tax rate)
EBIT is the operating income which is available for interest
payment, taxes and dividend Payment. EBitDA includes depreciation
too. EBIT =Sales-COGS-Depreciation
EBITDA =Sales -COGS
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