FCF equals Cash from Operations minus Capital Expenditures. FCF shows cash generated after deducting non-current capital investments. Formula can be derived from Income statement and balance sheet
ABC identifies activities and assigns costs to products based on actual consumption. Assigns more indirect costs to direct costs compared to conventional costing. Helps identify unprofitable products and inefficient processes
Operating expenses are ongoing costs needed to keep a business running. They include rent, utilities, payroll, office supplies, and marketing costs. Operating expenses can be fixed (constant) or variable (fluctuating)
Measures income available to pay debt before interest, taxes, depreciation, and amortization. Banks and credit rating agencies use it to assess company's debt repayment ability. Ratio shows actual cash flow available to cover debt and liabilities
Payback period measures time needed to recover investment costs. Shorter payback periods indicate more attractive investments. Calculated by dividing investment cost by average annual cash flow
EV/EBITDA ratio compares company value to cash earnings minus non-cash expenses. Enterprise value includes market capitalization, debt, and cash reserves. EBITDA excludes financing, tax effects, and accounting practices