[Verse 1] Picture a company swimming in cash Not the money locked in inventory stash Not the bills they still need to pay But the treasure chest at the end of day Operating income minus taxes due Subtract the capital expenditures too Add back depreciation's paper loss This calculation shows who's really boss [Chorus] Free Cash Flow to the Firm, FCFF Money for everyone who took the bet Debt holders, equity shareholders waiting FCFF shows what cash they're creating Take EBIT times one minus tax rate Add depreciation, don't hesitate Subtract capex and working capital change Now you've got the number that's never strange [Verse 2] Why do analysts treasure this metric gold? It tells a story that must be told Revenue might lie, earnings deceive But cash in the vault you can believe Valuation models need this foundation DCF requires cash estimation Enterprise value starts with this stream FCFF makes the numbers gleam [Chorus] Free Cash Flow to the Firm, FCFF Money for everyone who took the bet Debt holders, equity shareholders waiting FCFF shows what cash they're creating Take EBIT times one minus tax rate Add depreciation, don't hesitate Subtract capex and working capital change Now you've got the number that's never strange [Bridge] Before financial leverage takes its slice FCFF shows the company's pure price Available to all who financed the dream The bondholder and stockholder team When working capital grows too fast It steals from cash that could have last But when it shrinks, it adds back more To the treasure in the company store [Chorus] Free Cash Flow to the Firm, FCFF Money for everyone who took the bet Debt holders, equity shareholders waiting FCFF shows what cash they're creating Take EBIT times one minus tax rate Add depreciation, don't hesitate Subtract capex and working capital change Now you've got the number that's never strange [Outro] FCFF, the cash that's truly free For every capital provider's spree Remember the formula, sing it true FCFF will carry analysts through
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