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5.Measure the free cash flow of the firm. 2020 FCF = 2020 NOPLAT + 2020 Depreciation - 2020 net investment NOPLAT = EBIT - taxes
5.Measure the free cash flow of the firm.
2020 FCF = 2020 NOPLAT + 2020 Depreciation - 2020 net investment NOPLAT = EBIT - taxes Net investment = Net Capital Spending + Change in net working capital (NWC) Net capital spending = ending net fixed assets - beginning net fixed assets + depreciation
Change in net working capital = ending NWC - beginning NWC
6. Find NWC in 2020 and 2019 in Table 2.
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