GraduateTutor.com

Many valuation models start with EBIT. EBIT includes all kinds of income earnings and expenses before only interest and tax expenses. However, not all revenues and expenses that show up in EBIT must be valued when evaluating a business. What line items found in EBIT must be removed when preparing cash flows for a DCF? This article discusses this question in detail and gives you examples of different types of line items that you must remove from EBIT in a DCF valuation. These include incomes, expenses, nonrecurring line item, temporary items, etc.

You can use the levered or unlevered free cash flow to value a company using the DCF method of valuation. However, there are different situations when you prefer one over the other. This article discusses three specific instances when you can use the levered free cash flow instead of the unlevered free cash flow when valuing a company using the DCF method.

You can use the levered or unlevered free cash flow to value a company using the DCF method of valuation. However, there are different situations when you prefer one over the other. This article discusses three specific instances when you should use the unlevered free cash flow instead of the levered free cash flow when valuing a company using the DCF method.

Why/When do you use unlevered FCF when valuing a company using the DCF method?