Financial Modeling Final Exam (Latest Exam
2026) || Most Recent Exam Actual Complete
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Levered cashflow formula
EBITDA - change in Net Working Capital - CapEx - Depreciation
EBITDA
Net Income + Interest + Taxes + Depreciation + Amortization;
alternatively - Operating Income/EBIT + Depreciation and
Amortization
,Change in NWC
This captures the cashflow effect of AP and AR.
- Net Working Capital is the funding the company requires to keep
its operations going.
- The change in NWC captures the fluctuations from year to year
Capex
Capital assets, or physical assets that are depreciated over their
useful life are excluded because depreciation is excluded.
- However, CapEx can be a very significant cost to the organization
but it is depreciated over time.
Mandatory debt payment
Pay down of the current portion of debt based on the debt
schedule
,Unlevered cash flow
Unlevered cash flow removes interest payments from the
calculation
- It focuses on the total cash available to all investors, both debt
holders and equity holders It is used to calculate the enterprise
value of the firm.
- Financially, a company is built on its capital structure and capital
structure includes both debt and equity
- Because capital structures vary among companies it can be
difficult to create an apples-to-apples comparison, however, by
removing the effects of debt payments and focusing on the cash
from operations only, it is possible to create a better point of
comparison among different companies
- Plus capital structure can change over time and so the impact of
debt payments will change with it
Unlevered cash flow equation
Operating Income/EBIT + Depreciation – Cap Ex - Change in NWC
- Taxes
, Operating Income/EBIT
Calculated using Net Sales - SGA.SGA includes depreciation so it
must be added back
Cap Ex
Same as with the levered cash flow calculation, Cap Ex is removed
because it's depreciated over the long term and because
depreciation is removed from the calculation
Change in NWC
The fluctuation in the cashflow needed to support the operations is
adjusted for
2026) || Most Recent Exam Actual Complete
Real Exam Questions And Correct Answers
(Verified Answers) Already Graded A+ |
Guaranteed Success!! Newest Exam | Just
Released!!
Levered cashflow formula
EBITDA - change in Net Working Capital - CapEx - Depreciation
EBITDA
Net Income + Interest + Taxes + Depreciation + Amortization;
alternatively - Operating Income/EBIT + Depreciation and
Amortization
,Change in NWC
This captures the cashflow effect of AP and AR.
- Net Working Capital is the funding the company requires to keep
its operations going.
- The change in NWC captures the fluctuations from year to year
Capex
Capital assets, or physical assets that are depreciated over their
useful life are excluded because depreciation is excluded.
- However, CapEx can be a very significant cost to the organization
but it is depreciated over time.
Mandatory debt payment
Pay down of the current portion of debt based on the debt
schedule
,Unlevered cash flow
Unlevered cash flow removes interest payments from the
calculation
- It focuses on the total cash available to all investors, both debt
holders and equity holders It is used to calculate the enterprise
value of the firm.
- Financially, a company is built on its capital structure and capital
structure includes both debt and equity
- Because capital structures vary among companies it can be
difficult to create an apples-to-apples comparison, however, by
removing the effects of debt payments and focusing on the cash
from operations only, it is possible to create a better point of
comparison among different companies
- Plus capital structure can change over time and so the impact of
debt payments will change with it
Unlevered cash flow equation
Operating Income/EBIT + Depreciation – Cap Ex - Change in NWC
- Taxes
, Operating Income/EBIT
Calculated using Net Sales - SGA.SGA includes depreciation so it
must be added back
Cap Ex
Same as with the levered cash flow calculation, Cap Ex is removed
because it's depreciated over the long term and because
depreciation is removed from the calculation
Change in NWC
The fluctuation in the cashflow needed to support the operations is
adjusted for
