Unlevered Cash Flows

[lev]

Can anyone comment if the following formula for calculating the Free Cash Flows is correct?

FCF = EBIT (1-T) - change in NWC - change in CapEx

Schweser doesn't seem to mention it. The only one they have is

FCF = CFO - (CapEx - After-tax proceeds from asset sales).

 

[edwardtheape]

Hi Lev,

I like the second one better, because it has interest expense. Other than that they look like the same thing. CFO - net investments is how I think of FCF.