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Financial Modeling Deferred Tax

Financial Modeling of Deferred Tax

Financial modeling deferred tax is an important step in the calculation of free cash flow. Deferred tax arises from the difference of depreciation methods used between a company’s tax filing and its financial statements to its shareholders. Since companies use a higher depreciation rate for tax purposes, it creates a deferred tax (future tax) liability.

 

Financial Modeling Deferred Tax

Additional Questions and Answers

CFI is the official global provider of financial modeling and valuation analyst FMVA Designation. CFI’s mission is to help anyone become a world-class financial analyst and has a wide range of resources to help you along the way.

In order to become a great financial analyst, below are some additional questions and answers for you to explore further:

  • What is are the types of financial models?
  • What is sensitivity analysis?
  • What is bookkeeping?
  • What are the most common valuation methods?

Example Excel Model

Below is a screenshot from one of CFI’s online analyst training and certification courses, offered 100% online.

To learn How to Build an Excel Model step-by-step, click on the image below.

financial modeling questions and answers

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