Discounted cash flow

Key differences include the incorporation of tax, proper treatment of the increase in work-in-process inventory and engineering expenses.The cash flows did not compute for the net operating profit after tax (NOPAT). Moreover, it attributed the increase in work-in-process to the income statement, when it should have been added to the NOPAT as an increase in working capital. Engineering costs, on…

Case Analysis Groupon Groupon is an internet website company focused on generating revenue by utilizing relationships with merchants to provide consumers with discounts on select items. The goal of the discounted vouchers is to drive additional consumer store traffic and generate revenue for merchants which are shared with Groupon via a predetermined contractual percentage. Groupon generates visibility and exposure with email and social networking to increase consumer spending at specific…

Anderson 2 May 2016 Introduction It is essential to evaluate long-term projects by comparing cash flows accruing at different points in time. The present and future value concept converts streams of cash flow to a common point in time to support investment appraisal; this enables comparison of costs and benefits accruing over the life of a project. Present Value Concept Discounted cash flow techniques acknowledge the time value for money (Frick).…

they handle the forecasting of goods, services, and provide valuable information for determining capital budget expenditures. Current and future projects for organizations are under constant scrutiny by this team to ensure the expected cash in-flows and out-flows stay within the forecast. One critical process management must take into…

The cash-to-earnings factor of 7.89 percent is calculated per the National Association of Certified Valuation Analysts (NACVA) guidelines based on the after-tax net income capitalization rate of 26.20 percent, minus the after-tax net cash flow rate of 18.32 percent (Tebay, et al. 2012, ch. 5 p. 12). The intangible earnings factor of 5.00 percent is simply a subjective qualitative…

Investment Summary We issue a BUY recommendation on Inari Amertron Berhad (INRI) with a target price of RM4.98 using the Discounted Cash Flow (DCF) method. This offers a 20.29% of upside from its closing price of RM4.14 on 1 December 2015. Our TP of RM4.98 implies a FY16 PE of 23.13x as we believe that INRI deserved to be trading at a premium due to its stronger growth potential with various buying points such as 1) Bright Prospects of RF Segment due to higher RF content in smartphone driven by…

Apple’s needs: From the current situation of Apple, it seems it is seeking to reboot its business in order to recover the decline in its iPhone sales. The company is looking for a way to retain it fabulous growth and maintain its financial strengths. Thus, Apple is studying the idea of acquiring another business, particularly in a business in the music streaming, because that mostly will help the company in increasing and supporting Apple Music Services that they introduced in 2015. The company…

earns revenue through the sale of women’s clothing and accessories in stores and online. Chico’s defines the critical accounting policies that they use to explain any discrepancies between the dollar amounts on the financial statements and the actual cash amount to its Audit Committee and Board of Directors (Chico’s FAS, Inc. 10-K). Chico’s defines six estimates used in their financial statements: inventory valuation and shrinkage, revenue recognition, evaluation of long-lived assets and…

is because capital investment functions to generate cash flows in years to come and also acts to uphold the profitability of existing business activities (Watson and Head, 2007). Normally, a company will need to use up a huge amount of cash outflows at the starting point of the projects. Later they will get cash inflows on the following years. Careful evaluation on the capital investment projects needs to be done, as it requires a huge sum of cash to be raised and invested. Furthermore, it will…

Note that there is a difference between UFCF defined above and what are referred to as “free cash flows” in Exhibit 13 (on line 14)? • Discount Rates. As we mentioned when discussing the Marriott case, the choice of discount rates is an important part of any valuation procedure. It is worthwhile to spend some time thinking carefully about these issues. – Congoleum’s equity beta is known (see Exhibit 9). Do you need to rely on comparable companies’ data to obtain Congoleum’s asset beta? – For the…