Cash Flow Statement Ratios Flashcards
1
Q
Free Cash Flow (general)
A
FCF= CFO- CFI
‘POCKET CHANGE’ of the business
2
Q
Free Cash Flow (firm)
A
FCF= CFO-CFI
3
Q
Free Cash Flow (equity)
A
FCF (eq)= CFO + (interest paid* (1-effective tax rate))
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)