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Working capital. Working capital ( WC) is a financial metric which represents operating liquidity available to a business, organisation, or other entity, including governmental entities. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. Gross working capital is equal to current assets.
Unlevered free cash flow (i.e., cash flows before interest payments) is defined as EBITDA − CAPEX − changes in net working capital − taxes. This is the generally accepted definition. If there are mandatory repayments of debt, then some analysts utilize levered free cash flow, which is the same formula above, but less interest and ...
Free cash flow to equity (FCFE) is the cash flow available to the firm's common stockholders only. If the firm is all-equity financed, its FCFF is equal to FCFE. FCFF is the cash flow available to the suppliers of capital after all operating expenses (including taxes) are paid and working and fixed capital investments are made.
Working capital is like a bank account. Companies with more working capital have, well, more capital to work with. They're stronger than their peers because they have more resources to fund growth.
e. In financial accounting, a cash flow statement, also known as statement of cash flows, [ 1] is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing and financing activities. Essentially, the cash flow statement is concerned ...
Changing in net working capital: it is the cost or revenue related to the company's short-term asset like inventory. Capital spending : this is the cost or gain related to the company's fix asset such as the cash used to buy a new equipment or the cash which is gained from selling an old equipment.
Hamada's equation. In corporate finance, Hamada’s equation is an equation used as a way to separate the financial risk of a levered firm from its business risk. The equation combines the Modigliani–Miller theorem with the capital asset pricing model. It is used to help determine the levered beta and, through this, the optimal capital ...
The uniform net capital rule is a rule created by the U.S. Securities and Exchange Commission ("SEC") in 1975 to regulate directly the ability of broker-dealers to meet their financial obligations to customers and other creditors. [1] Broker-dealers are companies that trade securities for customers (i.e., brokers) and for their own accounts (i ...