标题: How to calculate the capital expenditures to derive Free Cash Flow [打印本页] 作者: metoyoushe 时间: 2011-7-13 13:37 标题: How to calculate the capital expenditures to derive Free Cash Flow
Dear all,
Under Session 8 in the schweser notes, it covers on Free Cash Flow.
how do i calculate the capital expenditures to be use in the calculation of Free Cash flow?
FCF = Operating Cash Flow - Capital Expenditures
I have google the internet and seen a few formulas to calculate capital expenditures.
The first method is :
Year 2009
Total Assets= 2000
Total Liabilities=1000
Year 2010
Total Assets= 4000
Total Liabilities=2000
The change in assets is 2000 (4000-2000) and the change in liabilities is 1000 (2000-1000). Subtract the two and you get a CAPEX (capital expenditure) of $1000.
The 2nd method is :
Assets at Year End = Assets at Beginning of Year + CAPEX – Depreciation
rearranging will be:
CAPEX = Assets at Year End - Assets at Beginning of Year + Depreciation
Lastly in the cash flow in investing, the cash outflow for plant & equipment, can i consider that as capital expenditures?
Which one is the appropriate one to use?
Thanks for the help 作者: soddy1979 时间: 2011-7-13 13:37
Capex = change in total assets - change in total liabilities
