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Cash Flows
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Cash Flow = Retained profits + Depreciation +/- Change in Working Capital - Purchases of Fixed Assets + New Financing.
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Operating Cash Flow - Retained after tax profits + depreciation +/- changes in working capital.
Free Cash Flow = Operating Cash Flow - Purchase of fixed assets - investments.
Total Cash flow = Free Cash Flow + New Financing.
Of particular importance is free cash flow.
Most businesses need to invest in new technologies, new plant and equipment, new real estate to sustain and increase income.
Therefore it is only free cash flows after investments in new fixed assets that are truely retained cash flows.
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Software Links
Cash Flow Forecasting
Reference Pages
Value Appraisal
Terminal Valuation
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