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What are the equations for Cash flow from Assets? What is another word for Cash Flow...

What are the equations for Cash flow from Assets?

What is another word for Cash Flow from Assets?

Solutions

Expert Solution

Cash Flow from Assets measures the total cash outflow or inflow from operations. It also measures the changes in cash flow through capital spending and net working capital.

1. Cash flow from Assets = Operating Cash Flow - Capital spending or changes in fixed assets -    Additions to Net Working capital

a) Operating Cash flow = EBIT + Depreciation - Taxes

b) Capital spending = Ending balance of net fixed assets - beginning balance of net fixed assets + Depreciation or Ending balance of gross fixed assets - Beginning balance of gross fixed assets

c) Additions to Net Working Capital = Ending Net working Capital - Beginning Net working capital

where, Ending Net Working Capital = Ending Current Assets - Ending Current Liabilities
and Beginning Net Working Capital = Beginning Current Asset - Beginning Current Liabilities


2) Another word for Cash flow from Assets is Cash Flow of the Firm.

jeff jeffy answered 2 years ago
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