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.
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:
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