Free Cash flow : Analysis
2 Answer(s)
Binny
The ideal FCF differs based on the industry.
Its almost always measured as a % of EBITDA. So FCF is mostly declared as 20% of EBITDA or 50% of EBITDA etc.
Jul 15 2013 12:52 PM
Its almost always measured as a % of EBITDA. So FCF is mostly declared as 20% of EBITDA or 50% of EBITDA etc.
Binny
Banks also adjust FCF for 1-time transactions, like a sale or acquisition. They will eliminate such impacts on the FCF to get a unbiased understanding.
Basically banks need to see that your FCF is growing and that it is enough to cover your cash liabilities specifically your interest expense and debt principal payments.
Jul 15 2013 12:55 PM
Basically banks need to see that your FCF is growing and that it is enough to cover your cash liabilities specifically your interest expense and debt principal payments.