Cash Flow Statement Ratios Flashcards

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1
Q

Free Cash Flow (general)

A

FCF= CFO- CFI

‘POCKET CHANGE’ of the business

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2
Q

Free Cash Flow (firm)

A

FCF= CFO-CFI

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3
Q

Free Cash Flow (equity)

A

FCF (eq)= CFO + (interest paid* (1-effective tax rate))

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4
Q

Investing and Financing Ratio *

A

investing and financing ratio- allows firms to analyze the ability for a company to pay back debts, pay dividends, and purchase assets.

Investing and Financing Ratio= CFO/(CFI+CFF)

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