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Steps to Calculating Free Cash Flow to Firm from Net Income

December 14, 2015

Net Income

+ Net Interest After Tax (Interest Expense (1 – tax rate))


Unlevered Net Income
+/- Change in Deferred Taxes


Net Operating Profit less adjusted taxes (NOPLAT)
+ Net non-cash charges (Depreciation)
+/- Change in Working Capital
– Capital Expenditures


Free Cash Flow to Firm

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