Estimating Sustainable Normalized Operating Free Cash Flow

24 Pages Posted: 22 Jun 2016 Last revised: 29 Jun 2016

Date Written: June 21, 2016


This note discusses the choices involved in estimating sustainable normalized operating free cash flow, which is the single most important driver of enterprise value. Being able to make a well-justified estimate of sustainable free cash flow is a basic skill in enterprise valuation. Heinz in 2012 and BP in 2016 are used as illustrations.

Keywords: Normalized Cash Flow, Sustainable Cash Flow, Enterprise Value

JEL Classification: G12, G31

Suggested Citation

Cooper, Ian Anthony, Estimating Sustainable Normalized Operating Free Cash Flow (June 21, 2016). Available at SSRN: or

Ian Anthony Cooper (Contact Author)

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom
+44 171 262 5050 (Phone)

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