Category Archives: Cash Flows

Free Cash Flow Computation

Free Cash Flows Today I want to talk about free cash flows, a critical element in implementing any of those decision rules. Remember, there are two components to NPV. There are Free Cash Flows, and there is a discount rate, because NPV if you recall from last time, is little more than just a discounted stream of cash… Read More »

Cash Flow Forecasting

Cash Flow Forecasting Making Cash Flow Smooth and Easy Setting a target One of the best ways to have a good control over cash flow is to have a frequent forecast that is properly maintained. If the owner gets a weekly forecast, he can easily have an outlook for his business for the next year… Read More »

Cash Flow Management

Understanding Cash Flow Management There are many aspects of managing finances of a company. One of these is cash flow management that looks after cash flow, whether inflows or outflows. Understanding this concept is essential to avoid any liquidity crisis in the business. If cash with a business runs low and there is no chance of… Read More »

Difference between Annuity Due and Ordinary Annuity

Annuity Due and Ordinary Annuity – Capital Budgeting Techniques We often encounter situations where we have multiple cash flows of same amount. A very common example of such cash flows is loan repayment plan where borrower is asked to repay the loan by making equal installments over some period of time. Almost all home mortgages, car… Read More »

Cash Flow

Cash Flow and Capital Budgeting Cash Flow Definition Fund Flow or Cash flow is the net amount of cash and cash-equivalents being transferred into and out of a business during a specific period of time. Why is cash flow important? The success of any business can be determined through its capacity to generate positive cash flows.… Read More »

Capital Budgeting Process

Capital Budgeting Process Capital Budgeting Process is a process of identifying and evaluating projects where businesses are expected to receive cash flows over a period longer than one year. Any corporate capital budgeting decisions that can affect future earnings can be evaluated using this framework. Examples of Capital Budgeting Decisions: For example, decisions about whether to… Read More »