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As you calculate FCF, there are three main components, cash flow from operations which comes from the income statement and change in net operating working
As you calculate FCF, there are three main components, cash flow from operations which comes from the income statement and change in net operating working capital (NOWC) and change in net fixed assets (NFA) from balance sheet statements. Why are we calculating changes for the components that are obtained from balance sheet but the actual number for the component that comes from the income statement? Why do we subtract the change in NOWC and NFA from the cash flow from operations to get FCF for the year?
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