Real-terms FCF in Emerging Markets
There is one formula in Reading 39 - Valuation in Emerging Markets that I have never been comfortable with.
On page 280 of V4, it says:
FCF[t] = (1 - g[t]/ROIC[t])*NOPLAT[t] - NWC[t-1]*(1 - IX[t-1]/IX[t])
I have omitted an R superscript from everything, and put the subscript indicating time period in square brackets. The form of this equation that is familiar to me is:
FCF = NOPLAT + NCC - Change in NWC - Capex
There are so many things I don't get about the first expression:
1) What is the intuition for the term (1 - g[t]/ROIC[t])?
2) Where are the noncash charges?
3) Where is the capex?
4) I get the adjustment to last period's NWC, but shouldn't that be netted against the current period NWC?
Thanks. |
发表于 2011-7-13 15:26
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