Question

in calculating the FCFE shall i deduct the bank overdraft from the enterprise value as well or only the long and short term interst bearing debt

Answer 1

When you calculate FCFE you only get the cash flow to equity so you don't have to deduct debt from it.

Answer 2

Yes. You need to deduct bank overdraft as well. To arrive at FCFE from FCF you need to deduct debt and debt equivalents. Bank overdraft is also like bedt. So need to be deducted. Hope this helps!!

Answer 3

Pooja, what you wrote is incorrect. To calculate FCFE you get the Net Income and you deduct the reinvestments from it. This means that FCFE will not include debt and you don't need to substract it one more time.