Revenue |
Net income |
---|
– Operating costs |
+ Depreciation and amortization |
– Depreciation and amortization |
– Net capital expense |
= Earnings before interest and taxes (EBIT) |
– Increase in net working capital |
– Interest expense |
= Equity free cash flow (EFCF) |
= Earnings before taxes |
+ After-tax interest |
– Taxes |
= Capital free cash flow (CFCF) |
= Net income |