Cash Flow Metrics Workout. So we have a list of items here that are going to either factor into our calculations or not and the the task is to figure out which ones factor into which cash flow metrics. The first thing that I'd like to do is, I have a column here called Cash flow, and I just want to take the numbers as they are presented in the financial statements and convert them into the actual cash flow. In other words, is it gonna show up as a positive or negative in our cash flow calculations, because I think that'll help us in building our formulas. So I'm gonna take the net income and that's gonna be a positive, 'cause net income is positive to cash flow. The depreciation and amortization are going to be positive, as well. Now interestingly, we have a very small amount of depreciation and a very large amount of amortization, so that tells me that this is not a manufacturing company, but rather a company that has a lot of intellectual property. Stock based compensation expense. This is something that shows up on the income statement as a negative, but we usually add it back as a positive, because it is an accounting adjustment. Losses from foreign currency adjustments, as well. We have a decrease in working capital of 42.1. When working capital goes down, cash goes up, so that's actually gonna be positive. Purchases of fixed assets, that's going to be also a cash outflow, so that's correct as a negative. Same for purchases of intangibles. Repayment of short-term and long-term debt is also a negative, and dividends are also negative. So the cash flow statement items were correctly presented, it's just the income statement where we have to do some flipping. The first thing it asks us for is the funds from operation. The funds from operations, again, typically, we're just going to do the operating cash flows without any of the changes in the operating assets. So that's going to be the sum of my net income, my depreciation, my amortization, and then the non-cash adjustments, as well. Everything up to the operating assets, which are the OWC in this case. There are my funds from operations. Now to calculate my operating cash flow, the traditional operating cash flow, it's going to be my funds from operations plus the change in OWC. My free cash flow is going to be my operating cash flow less my purchases of fixed operating assets, and in this case, because this is some sort of a publishing or media company, we are going to also net the purchases of intangible assets. So that's going to be plus purchases of fixed assets plus purchases of intangible assets and that gives me a negative free cash flow of 2490. My levered free cash flow is going to be my free cash flow less any repayments of short and long-term debt. In this case, I'm going to add them, because I have them here as negative. So my levered cash flow is 2864.6. Now my discretionary cash flow, we don't deal with the short and long-term debt with the discretionary cash flow, we just deal with the dividends, so the discretionary cash flow is actually gonna be my free cash flow less the dividends. So in this case, it's gonna be plus the 176.3