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1st Method:
EBITDA ( earning before interest-tax-depreciations and amortization) – change in working capital( including income tax paid)= Cash flow from operations
Then : - increase CAPEX= free cash flow
=>Free cash flow- dividend paid= net cash flow for the period
2nd method:
Net income + depreciation & provisions+ deffered tax = cash flow from net income
+ Variation working capital (variation payables+ variation receivables +variation stocks+ increase tax debt )= net cash flow from operations
Then : - increase CAPEX= Free cash flow.
=>Free cash flow - Dividend = net cash flow for the period.
The direct / indirect method
The direct method begin with beginning cash balance and added cash receipts then subtract cash disbursements for the selection period , at the end you will reach to cash surplus or deficit.
The indirect method classify it into three categories are ( operating - investing - financing )
and start with net income and try to adjust all increase or decrease in balance sheet items that will affect on cash flow, surely according to related categories.
