Real-terms FCF in Emerging Markets everything, expression, equation, familiar, period

anshultongia

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.