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: Suggested Citation