Below is the proxy-model of potential future FCF FCF:
FCF = Total Revenue - COGS - SG&A - D&A - |
NCEtaxable - Interest - δWC - Income Tax - CAPEX + |
Fixed Assets Sold |
δWC = δ ( |
COGS - SG&A - CAPEX - Interest) · KWC |
D&A = CAPEX · KDA |
Interest = L · rL |
Income Tax = (Total Revenue - COGS - SG&A - |
D&A - NCEnon-taxable) · KTAX |
where
L
L | Loan-in |
---|---|
rL | Loan interest annual rate (usually around 5%) |
KWC | WC to the Cash Expenses ratio (usually around 25% which corresponds to the 3-months budget) |
KDA | D&A to CAPEX ratio (usually around 20% which corresponds to 5 years write-off) |
KTAX | Income Tax Rate |
+ - +
...
(usually around 30%) | |
Fixed Assets Sold | Proceeds from selling Fixed Assets |
---|---|
NCEtaxable | taxable NCE |
NCEnon-taxable | non-taxable NCE, for example annual portion of the natural reserves depletion |
See also
...
Business / Business Administration / Financial Management / Financial Planning
...