Ebit1-tax rate + depreciation
Estimating Cash Flows DCF Valuation. Aswath Damodaran 2 EBIT ( 1 - tax rate) - (Capital Expenditures - Depreciation) - Change in Working Capital = Cash flow to the firm Depreciation is a cash inflow that pays for some or a lot (or sometimes all of) the capital expenditures. Free Cash Flow to Firm = EBIT*(1-tax rate) - CapEx +(Depreciation + Amortization) - Change in Non-Cash Working Capital. In a DCF model, the present value of equity cash flows reflects only the value of equity claims on the firm whereas firm cash flows reflect the value of all claims on the firm. Rates of depreciation (for Income-Tax) for AY 19-20 or FY 18-19. Income Tax Depreciation is very important expense from tax perspective. It is very important to take correct rate for claiming depreciation.