Current Assets Net Working Capital (NWC) Current Assets - Current Liabilities Net Operating Working Capital (NOWC)Current Assets - Non-interest Bearing Current Liabilities Operating Capital (OC) NOWC + Net Fixed Assets Net Fixed Assets (NFA) Gross PPE - Acc. Dep. Net Cash Flow (NCF)
Net Income + Dep. & Amort. (Net Income + Non cash
charges - Non Cash Revenues)
NOPAT + Depreciation and Amortization (Non Cash
Charges) Net Investment in Operating Capital Operating Capital CY - Operating Capital PY Gross Investment in Operating Capital Net Investment + Depreciation and Amortization OCF - Gross Investment in Operating Capital OCF - (Capital Expenditure* + NOWC) Free Cash Flow (FCF) NOPAT - Net Investment in Operating Capital
IMPORTANCE Measure the performance of a company's operations or the effectiveness of its operating managers and employees. Liquidity Liquidity
vs. accounting profit; valuable to investors
coz cash not paper profit is paid out as dividends and plowed back in the business.
Operating Cash Flow (OCF)
Economic Value Added (EVA)
Market Value Added (MVA)
Cash available for distribution to all
investors
NOPAT - (After tax Cost of Capital) (Operating Capital)
Measures managerial effectiveness in a
given year.
(Share Price * No. of Shares) - Book Value of Co.
in consonance of shareholder wealth
maximization; measures the effects of managerial actions at the very inception of the company