Cash flow information

Overview

	Enterprise (Firm) Before interest payment.	Equity (Consolidated) After interest payment. Includes non-controlling interests and preferred dividend.	Owner (Common) After non-controlling interests and preferred dividend. Price level.
Before CapEx		Used for Cash ROE. CFO CFAT	CCFAT
After Maintenance CapEx	Used for EV multiples, Return on Assets, Capital Employed and Invested Capital. FE, FE': Different interpretations of Maintenance CapEx. Cash-NOPAT: FE' − Change in WC		Used for Price multiples. OE, OE', OE'': Different interpretations of Maintenance CapEx Adj OE: adjusted for R&D.
After Net CapEx	Used as free cash flow series for DCF. FCFF Adj FCFF: adjusted for R&D.	FCF: Standard definition. Input for FCFF FCFE: Added net borrowings.

Enterprise

term	description	formula
Depreciation	Reduction in the value of the tangible assets over time.
Amortization	Reduction in the value of the intangible assets over time.
R&D Amortization	Proxy of Research and Development investment amortization.	valueFactor × average Research & Development over period where period is the period during which a business systematically conducts research with the aim of developing a new product or improving an existing one (R&D), is the initial phase of a larger multiphase “technology life cycle", using an average for the industry. valueFactor is the value that is created by Research and Development, using an average for the industry. Currently always 1.
Depreciation and amortization	Non-cash activity expenses. Depreciation refers to prorating a tangible asset's cost over that asset's life Amortization usually refers to spreading an intangible asset's cost over that asset's useful life.
Investment/asset impairment charges	Used to describe for writing off worthless goodwill.
Stock based compensation	Payments to employees without paying them cash.
Stock based compensation / Revenue	Measures the percentage of sales that is allocated to Stock Based Compensation.	Stock based compensation ÷ Revenue
Change in Deferred income taxes	An increase or decrease in a deferred tax asset or liability.
Certain other non-cash charges	Refers to any charges which did not involve cash, that are used to calculate Owner Earnings.	Investment/asset impairment charges + Deferred income taxes Remark: Adjustment for Special Charges is missing.
Other non-cash items	Aggregate of some items that are part of the net result, but without a real cash outflow or inflow.
Change in non-cash Working Capital	Refers to how the cash flow has changed based on the non-cash working capital changes. One of the items that has to be added to income to reconcile cash flow from income. Equal to minus increase in non-cash Working Capital.	Change in Accounts Receivable + Change in Inventory + Change in Prepaid Expenses + Change in Accounts Payable + Change in Accrued Liabilities + Change in Income Taxes Payable + Change in Other Working Capital
Change in Accounts Receivable	The increase or decrease in the cash that customers owe the company.
Change in Inventory	The difference between the inventory totals for the last reporting period and the current reporting period.
Change in Prepaid Expenses	The increase or decrease in the expenditures that have not yet been recorded by a company as an expense, but have been paid in advance.
Change in Accounts Payable	The increase or decrease in the cash amounts due to vendors or suppliers for goods or services received that have not yet been paid for.
Change in Accrued Liabilities	The increase or decrease in expense incurred but not yet paid for.
Change in Income Taxes Payable	The increase or decrease in taxes due to the government within one year.
Change in Other Working Capital	One of the major ways that net income and operating cash flow can differ.
Net Acquisitions	The net impact on cash of the company's acquisition & disposal strategy.
Cash Flow from Investing	The aggregate change in a company's cash position resulting from any gains (or losses) from investments in the financial markets and operating subsidiaries, and changes resulting from amounts spent on investments in capital assets.
Debt issued	The cashflow from issuance of long-term debt securities.
Debt repaid	The cashflow from repayment of long-term debt securities.
Net Borrowings	The total amount of money borrowed for financing activities for a business.	Debt issued − Debt repaid
Common stock issued	The amount received for the issuing of common stock.
Common stock repurchased	The amount paid for the re-acquisition by a company of its own common stock.
Common stock issued (repurchased)	Represents the net cash inflow (outflow) from common equity changes. Includes additional capital contributions from share issuances and exercise of stock options.	Common stock issued − Common stock repurchased
Dividend Paid	Payment made by a corporation to its shareholders.
Cash Flow from Financing	Cash Received from Issuing Stock or Debt − Cash Paid as Dividends and for Re-Acquisition of Debt/Stock
Maintenance Capital Expenditures (Accounting Depreciation)	Any expenditure which is undertaken to sustain current revenues and profits. It is the actual depreciation. Uses Accounting Depreciation.	Depreciation
Maintenance Capital Expenditures (Greenwald)	Any expenditure which is undertaken to sustain current revenues and profits. Direct estimate based on Bruce Greenwald's method.	Revenue × (−Net Capital Expenditures.all yr sum − Revenue.all years diff ÷ Fixed Assets turnover.all yr avg) ÷ Revenue.all yr sum
Maintenance Capital Expenditures (mix)	Any expenditure which is undertaken to sustain current revenues and profits. Estimate as a mix between direct estimate (Greenwald) and accounting depreciation.	w × Maintenance Capital Expenditures (Accounting Depreciation) + (1−w) × Maintenance Capital Expenditures (Greenwald) w = average of: min(1, 4 × Depreciation rate.10y avg) 1 − 0.1 × min(10, Revenue.years) min(1, 2 × Revenue.10y CAGR min(1, Fixed Assets turnover.CV) in [0.67 × Maintenance Capital Expenditures (Accounting Depreciation), 1.33 × Maintenance Capital Expenditures (Accounting Depreciation)]
Growth Capital Expenditures	A form of capital expenditure undertaken by a company to expand existing operations or further growth prospects.	Capital Expenditures − Maintenance Capital Expenditures (Accounting Depreciation))
Capital Expenditures (CapEx)	Expenditures creating future benefits. (negative)
Net Capital Expenditures	Expenditures creating future benefits, including payments for acquisition of intangible assets and any proceeds from the sale of property, equipment and intangibles.
Long-term Reinvestments	Total expenditures undertaken by a company to expand existing operations or further growth prospects.	Research & Development + Capital Expenditures + Capital Expenditures + Acquisitions
Net Change in Cash	The increase or decrease in cash and cash equivalents from the beginning to the end of a year.
Burn rate	The rate at which a company uses up its supply of cash over time. It's the rate of negative cash flow quoted as a monthly rate.	max(0, -Net Change in Cash / 12)
Firm Earnings	The amount of cash flow from operations available for distribution after depreciation expenses, taxes and working capital are accounted for and paid. A.k.a. unlevered Free Cash Flow	Owner Earnings + Net income to non-controlling interests + Interest expense × (1 − Tax rate)
Firm Earnings'	The amount of cash flow from operations available for distribution after depreciation expenses, taxes and working capital are accounted for and paid. A.k.a. unlevered Free Cash Flow	Owner Earnings' + Net income to non-controlling interests + Interest expense × (1 − Tax rate)
Cash-NOPAT	Best estimate of Operating Earnings that can be made using the Cash Flow Statement.	Firm Earnings' − Change in Working Capital
Adjusted Free Cash Flow to the Firm	Free Cash Flow to the Firm adjusted for Research & Development amortization.	Free Cash Flow to the Firm + R&D Amortization
Free Cash Flow to the Firm	The amount of cash flow from operations available for distribution after depreciation expenses, taxes, working capital, and investments are accounted for and paid. A.k.a. unlevered Free Cash Flow	Free Cash Flow + Interest expense × (1 − Tax rate)

Equity

term	description	formula
Cash Flow After Taxes (CFAT)	Also Operating After Tax Cash Flow (OATCF). a measure of financial performance that looks at the company's ability to generate cash flow through its operations.	NOPAT + Depreciation and amortization + Non-Cash items
Cash Flow from Operations	The amount of money a company brings in from its ongoing, regular business activities, such as manufacturing and selling goods or providing a service to customers. Consolidated. After taxation and interest paid.	Net income From Continuing Operations (IAT) + Depreciation and amortization + Certain other non-cash charges + Stock based compensation + Non-Cash items + Change in Working Capital
Adjusted Cash Flow from Operations	The amount of money a company brings in from its ongoing, regular business activities, such as manufacturing and selling goods or providing a service to customers. Consolidated. After taxation, interest paid, stock based compensation and preferred dividend.	Cash Flow from Operations − Stock based compensation − Preferred dividend
Free Cash Flow to Equity	A measure of how much cash is available to the equity shareholders of a company after all expenses, reinvestment, and debt are paid.	Free Cash Flow + Net borrowings
Free Cash Flow	Cash flow available for distribution among all the securities holders of an organization. Value after subtracting Net CapEx.	Cash Flow from Operations − Net Capital Expenditures

Owner

term	description	formula
Common Cash Flow After Tax (CCFAT)	After-tax earnings plus depreciation available to holders of common stock.	Net income + Depreciation and amortization − Preferred dividend
Adjusted Owner Earnings	Owner Earnings, adjusted for Research & Development amortization.	Owner Earnings' + R&D Amortization
Normalised Owner Earnings	Owner Earnings flow adjusted to remove the effects of seasonality and expenses that are unusual or one-time influences.	Revenue × Owner Earnings margin.6y avg
Owner Earnings	The real dollar amount an owner can withdraw from the business without affecting operations.	Cash Flow from Operations − Stock based compensation − Net income to non-controlling interests − Maintenance Capital Expenditures (mix)
Predictive Owner Earnings	Next year Owner Earnings estimate according quadratic regression.	next year value of quadraticRegression(Owner Earnings)
Owner Earnings'	Cash flow available for distribution among all the securities holders of an organization. Value after subtracting maintenance CapEx.	Cash Flow from Operations − Net income to non-controlling interests − Maintenance Capital Expenditures (Accounting Depreciation)
Owner Earnings''	The real dollar amount an owner can withdraw from the business without affecting operations.	Net income + Depreciation and amortization + Certain other non-cash charges + Change in Working Capital − Maintenance Capital Expenditures (Accounting Depreciation).5y avg