General Flashcards
1
Q
What is unlevered FCF
A
FCFF
EBIT*(1-T)+ DA-change NWC- capex
2
Q
What is levered FCF
A
FCFE
NI+ DA- change NWC- capex- debt repayments
3
Q
What is FCFF also called
A
Unlevered FCF
4
Q
What is FCFE also called
A
Levered FCF
5
Q
How to value private company
A
Same as public, but maybe
- add an illiquidity discount (10-15%)
- likely need to use a public WACC
6
Q
When to use EV/EBIT, EV/EBITDA, and P/E?
A
P/E for FIs such as banks and insurance due to interest expense/revenue
EV/EBIT for when there’s large D&A e.g. manufacturing
EV/EBITDA for where fixed assets are less important and DA relatively smaller e.g. diversifieds
7
Q
Multiple to use for companies with large capex
A
EV/ (EBITDA-capex)
EV/ EBIT
Removing capex can be less subjective than dep
