Free cash flow vs Net profit in DCF modelling


Hello!

I have been watching Martin shkreli’s DCF videos, a lot of DCF models use free cash flow as their basis, while he seems to use net profit

The idea is that over the lifetime of the company, the 2 would be end up basically the same and the result you get using either should be basically the same but it’s much easier to use net profit

He does use the cashflows to check that they’re making enough to keep in business, but the main focus is on net profit. In some models (REITS for example) I can tell FCF is definitely much more important, but Is this ok in general? I don’t want to learn wrong and make it harder on myself

Thanks!


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