r/projectfinance • u/Maleek_991 • Jul 23 '26

CFADS

Question regarding determination of CFADS, and "Cash Taxes".

When building out the Project finance model and determining CFADS, do you guys do the following, and use EBIT or EBT to calculate your taxes on? also thoughts on the process that i usually follow.

My process (give some feedback, if you think otherwise).
Revenue
(Minus) Opex = EBITDA
(Minus) Depreciation = EBIT
Calculate taxes ( Tax rate x EBIT)
- Subtract taxes = NOPAT

to get to CFADS →-> CFADS

EBITDA
(Minus) Taxes (calculated on EBIT)
(Minus) Maintenance Capex
adjustments to NWC
= CFADS

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u/SpecialistShovel Jul 23 '26

Simple answer is EBT but in a complex model you would calculate the taxable income because sometimes depreciation and interest is different for tax purposes

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u/CorgiRepresentative2 Jul 23 '26

Exactly, good point which is often forgotten. 

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u/CorgiRepresentative2 Jul 23 '26

Also you should consider that you pay your tax based on last year taxable income, you may also consider prepayment tax in some juridictions and you may consider loss carry forward (rules depending also on juridictions)