FCINV, net investment or not???? net, remember, afternoon, investment, only

dvilayphet

So typically the "real world" calculation for FCF uses FCINV as "CAPEX", or the expenditure on fixed assets. It does not net out the disposition of fixed asset.


However in the text i remember reading multiple times about fixed capital investment being netted with dispositions of fixed assets.

Then on the afternoon mock in 2009, it asks for FCF, provides both investment in fixed assets and sales of fixed assets under the CFI section, and only uses investment.

So wtf, which one do they want us to use?

maryli

Wow, just checked the Stalla material and guess what? It is net FC. Honestly, I'm starting to get tired of these @#$%& formula notations that leave out the detail.

NO EXCUSES

OmarAdnan

CFAI book says net

kickthatcfa

markCFAIL:

I struggled with the same question. So what's the consensus? Net FCINV or not?

ryanlb

because the text makes multiple references to "FCINV" being "net" investment..... hence the point of the thread?

19831985

markCFAIL Wrote:
-------------------------------------------------------
> I KNOW to look under the CFI section (see the
> above 20 posts), the point is that the CFI section
> gave both "investment in fixed asset", and
> "proceeds from sale of fixed asset", and used only
> the investment portion in the FCF calculation (as
> opposed to the readings which say to use the net).

Ok, but why would you take into account proceeds from the sale of fixed assets? That is distractor information. The formula instructs us to use FC Inv, not Net FC Inv. This is no excuses material.

NO EXCUSES

jacksparrow

I KNOW to look under the CFI section (see the above 20 posts), the point is that the CFI section gave both "investment in fixed asset", and "proceeds from sale of fixed asset", and used only the investment portion in the FCF calculation (as opposed to the readings which say to use the net).

economicz

If a cash flow statement is provided, just look under the CFI section.

NO EXCUSES

SeanWest

Well then the mock is wrong, which i suspected.

llxx

You will not be given depreciation for the two years... you will be given Balance sheet for two years, and depreciation in the income statement for current period...

just so you are thinking straight!

CP