Addition of D& A in DCF
3 Answer(s)
Dipanjan
Yes as D&A are non cash expenses they should be added back. You are right.
Feb 01 2014 03:43 PM
Dipanjan
But I see the questions asks from EBITDA
EBITDA-DA-Interest&Div+D&A-Capex-Net Investment = DCF
Feb 01 2014 05:00 PM
EBITDA-DA-Interest&Div+D&A-Capex-Net Investment = DCF
Abhishek
You add D&A to EBIT or operating income not EBITDA thats why it was showing you the wrong answer.
So, EBIT(1-t) + D&A - CAPEX +/- Change in working capital = FCFF
Feb 02 2014 09:16 PM
So, EBIT(1-t) + D&A - CAPEX +/- Change in working capital = FCFF