How do you calculate Free Cash Flow?
John W asked:
I like the arguement that P/E and PEG may not be a great predictor of worth. I would like to look into Free Cash Flow; but I don’t understand how to calculate and how to value based on any calculations.
Buster Okelberry
I like the arguement that P/E and PEG may not be a great predictor of worth. I would like to look into Free Cash Flow; but I don’t understand how to calculate and how to value based on any calculations.
Buster Okelberry
The cash flow capital expenditures there are more detailed formulas but remember that it excessive weight in your analysis.
Free Cash Flow =
Net Income
+Depreciation and Amortization
-Change in working capital (change in current assets – current liabilities)
-Capital Expenditures