Questions tagged [cash-flow]

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125 views

When we analyze company we invest in using cash flow, how is their buying real estate different from buying computers? [closed]

When we invest our money in public companies, we may analyze them using cash flow. There can be two different scenarios: the company buys a lot of real estate or warehouses as their capital ...
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1answer
52 views

How should I classify a loan with less than 12 months left when constructing personal financial statements?

If I have a loan that I will finish repaying over the next 5 months (original tenure is 5 years so I've paid 55 monthly repayments already), if I'm constructing a financial statement today, does this ...
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1answer
113 views

If a company pays higher salary to employees, does that affect the Cash Flow of a company?

This question aims to understand Cash Flow, when we invest our money in companies. Let's say, if a company thinks: "We make so much money. Let's pay our people 66% more in salary." In that ...
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1answer
46 views

High dividends implied by high depreciation allowance?

Why could a high depreciation allowance imply a payment of high dividends? For example, in a course example, it is said that: British Energy would pay dividends out of cash flows. These were expected ...
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1answer
56 views

How is the cash flow perpetuity formula derived?

I don't know if this is the correct StackExchange community (it seems more related to personal finance than corporate finance), but I would greatly appreciate if someone could clarify to me this ...
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1answer
32 views

How can the EV/FCF be less than 1 for big companies barring extraordinary events

I found out that a large bank is reporting an EV/FCF of around 0.8, this seems ludicrously undervalued to me. What factors am i not taking into account?
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2answers
40 views

How to understand discounting future cash flow to present cash flow?

I was given this question in class. You have the opportunity to purchase an investment that will pay $2000 at the beginning of each year for three years. You can earn 5% per year on a comparable ...
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0answers
53 views

Unable to reach the values of Cash Flow Statement of FTS Fortis Inc

I am studying the cash flows statement of Fortis Inc. with the ticker symbol FTS. I am unable to reach the values for equity component, gain on disposition, working capital, changes in long-term ...
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1answer
70 views

Why do we discount cash flows with WACC instead of the opportunity cost?

First, a definition of WACC: The weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is proportionately weighted. All sources of ...
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2answers
42 views

Valuation of cash flow produced by a valuable asset

How should a cash flow produced by an asset of value (such as a stock or piece of land) be valued when the receipt of that cash flow is dependent on the ownership of such asset? For example, consider ...
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2answers
357 views

Where did the money go in the recent GME short squeeze?

Recently the GME stock moved in an extreme way, though there is more to it, these steps appear to have happened: A hedge fund had a large short position Many retail investors bought the stock, ...
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0answers
22 views

How to determine Capital expenditures in Free cash flow calculation

I know the formula to calculate free cash flow is: Free Cash Flow = Operating Cash Flow - Capital Expenditures However, what should be included in Capital Expenditures? In the following example, do I ...
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1answer
57 views

FCF Calculation Discrepancy

I'm trying to calculate the Free Cash Flow (FCF) for a some public companies. My understanding is that the FCF formula is: FCF = [Operating Income] - [Taxes] + [D&A] - [Chg in NWC] - [CapEx] I am ...
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0answers
68 views

Why is capitalization because of revenue fall important?

I have a question: Why is extra capital important in case of revenue drop, either quarter or annual revenue? I'm asking: what are the benefits of getting large amounts of extra capital if revenue drop ...
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1answer
66 views

Cash flow and dividends

I am learning about dividends and read that the free cash flow of a company is the money it can payout to investors through dividends. Free cash flow is the cash left over after a company pays for its ...
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2answers
223 views

I fear I may be laid off soon. How do ensure additional income?

I am a highly skilled worker in the oil & gas industry. I fear I may be laid off soon because gestures at everything. I have already begun rapidly applying to a lot of jobs. Unemployment in my ...
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1answer
130 views

Calculating Dividends paid out and Div ratio from finance sheets

So I was trying to calculate the dividends a company paid out from the balance / income sheet and the retained earnings (the delta between this and last period). I thought the dividends paid could be ...
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2answers
78 views

How is minority interest accounted for when calculating net income

Reading around, I found that minority interest is defined as interest in a company controlled by a company other than the parent company. Does that mean that anytime a company A becomes a shareholder ...
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1answer
184 views

Do I have to put 20% down on a condo so that I don't have to live in it for 1 year before renting it out to tenants?

I really want to purchase a condo and rent it out to tenants for some extra cash flow here in Queens, NY. I contacted a mortgage loan officer and he told me that I HAVE to put 20% down if I decide not ...
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3answers
559 views

Why does DCF ignore depreciation & amortization?

Discounted cash flow is a widely used method for valuing companies. It is based fundamentally on the sum net present value of the future free cash flows. The free cash flow is based on the EBITDA with ...
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1answer
79 views

Why is the 'Cash/Equivalents, Start of Period/End of Period' not the same?

On Walmart's cash flow statement here: The 'Cash, Equivalents, Start of Period' for 2018 is the same as the 'Cash, Equivalents, End of Period' for 2017 (6,867.0). (Please be aware, years are going ...
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3answers
75 views

Are maintenance fees and other fees covered by tenant or does the owner have to pay that?

I'm looking around apartments not to live in - but to rent out for some cash flow. I'm eying a particular co-op and was wondering: Hypothetically, I took out a mortgage for the co-op. Am I ...
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1answer
156 views

doubt regarding cash flow statement of bajaj finance?

I need a little here understanding this cash flow for Bajaj Finance. The cash flow here from operating activties is in negative and goes on increasing in negative value. While that for financing ...
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1answer
65 views

Comparing two options of investment

An investor is considering to buy a property. It costs $200.000,00 and it will allow him to receive $28.000,00 during the first year (which will decrease $300,00 per year). If he buys this property, ...
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3answers
214 views

Fastest way to pay off debt

What is the best order to pay off debt? Only debt being home loan. For example, my home loan has interest rate of 3.5% and the stock market (some total market fund, e.g., FZROX, VTSMX), ideally, goes ...
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1answer
214 views

Is Apple's depreciation now $12.5 or $11.3 billion?

I was casually reading the 10K for 2019 for Apple where I realized that I don't get the numbers. In the consolidated statement of cash flows (page 36) "Depreciation and amortization" for 2019 is ...
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1answer
84 views

If cash flow is calculated by net income + depreciation without adding capital expenditures, isn't it potentially very inaccurate? [closed]

To invest in companies I need to find out more about cash flow. Sometimes cash flow is defined and calculated by cash flow = net income + depreciation costs - capital expenditures ... (1) ...
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1answer
79 views

Is this how capital expenditure vs depreciation affect the net income?

Some people add back depreciation to net income, and then deduct capital expenditure from the net income, to reach what they consider the "true cash flow" or earning power of the company. What is the ...
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2answers
81 views

If operating cash flow yield of a company is negative along with revenue growth for current year , does that mean the company is in deep trouble?

I subscribed to one technical analytics service for the stock market. Here is one company whose fundamental indicators, I was looking at. Below is the fundamental analysis comparison of peer ...
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3answers
359 views

Best way to cash-out for passive income

First, my investing knowledge is very limited (still new to this, still learning). Second, my question is somewhat unfocused, sorry about that but I hope that there is a somewhat concrete answer, ...
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1answer
260 views

Investments that provide cash flow

We have just sold our house and moved into an apartment. This means that we a large sum of cash on hand that is just sitting in our savings account. Roughly $150k. We are therefore looking for ...
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2answers
2k views

Why are goodwill impairments on the statement of cash-flows of GE?

Consider the General Electrics 10-K report for 2018. In the statement of cash flows they report 22,136 million of cash gains attributed to (apparently positive) goodwill impairment in the value of ...
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1answer
64 views

What to consider Cash Flows in DCF analysis [closed]

When evaluating a project using discounted cash flow analysis, are cost savings (such as lower utility bills) as a result of taking on a project considered cash flows? Also, should the increase in ...
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4answers
300 views

Time value of money confusion [duplicate]

I am new to the stock market and currently trying to just get a basic understanding of the stock markets using online sources (investopedia). I came across this sentence when I was reading on a ...
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3answers
345 views

Take money out of paycheck into income producing asset(s)

My company has a 401k plan where they would take out money from my paycheck and match whatever I put into it. The concept of taking money out of my paycheck every two weeks and put it into a ...
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3answers
268 views

Perpetual Cash flow evaluation

If some cash flow paid $100, 100, 100, 100, 400, 100, 100,... perpetually (the pattern is 400,100,100) the first year is skipped. The discount rate is 10%. How do you find the PV of this?
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1answer
603 views

A question about CAPEX when Calculating Free Cash Flow (FCF)

When performing the following to determine free cash flow: Free Cash Flow = Operating Cash Flow - Capital Expenditures Do I include only Capital Expenditures (13,732 in the example below), or do I ...
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1answer
393 views

Bi-weekly payments with dividends or other investments

I am aware that dividends pay out 4 times a year. I would like to start earning passive income using dividends. My question is Is there any way to buy different stocks that payout at different times ...
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2answers
105 views

How to get Loan for more then 1 CashFlow Apartament?

I see that experienced people buy MANY flats using loan and then provide them for rent and that rental payments cover loan payments. But when I asked the bank to do it, the bank is glad to provide ...
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1answer
138 views

Confusion between revenue, earnings, investment and cash flow

I'm reading text book that introduces some financial concepts, all of which are really new to me. I'm reading a passage on Return on Investment Capital. In this passage, they try to demonstrate ROIC ...
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1answer
520 views

GnuCash Cashflow Report Account Display Depth

In a GnuCash Cashflow report how can i change the "Account Display Depth" of the sections? Money into selected accounts comes from Money out of selected accounts goes to Detail: In GnuCash's ...
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1answer
487 views

Calaculating Quartely cash collections [closed]

Sorry if this is the wrong place for this financial concept question, it's about the cash budget. Accounts receivables at the beginning of the year are $345. The company has a 60 day collection ...
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1answer
255 views

Bank - bad loan provision & bad debt written off [closed]

I am doing financial health analysis for banks. The health checks involved are: Bad Loan provisions > actual Bad Debts written off ? I check across financial statements, there are 3 related fields: ...
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3answers
312 views

What are the pros and cons of buying in cash and remortgaging vs taking a mortgage right from the start?

I was wondering what are the best options. Of course if depends so I would like to know what are the pros and cons of each solution. One obvious that came to mind - buying in cash allows to act at a ...
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1answer
130 views

What are the must know topics for personal accounting? [closed]

I'm 18 years old; last year I finished high school. I attended a school oriented in accounting, and even though I didn't care much about it at the time, now I realize how important is to know how to ...
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2answers
478 views

Does capex affect the Income Statement of a company in any form?

I know capital expenditures show up in a company's cash-flow statement, but do they have any effect on its income statement? That is, does the income statement show only revenue-generating activities?...
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1answer
1k views

How to read a balance sheet to determine if a company has enough money to keep paying their employees?

I heard today while listening to an accounting podcast that a balance sheet (or maybe it was a cash-flow document) can be used to determine if a company has enough money to pay its employees. Since ...
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1answer
1k views

Change In Cash and Cash Equivalents (cash flow) vs Cash And Cash Equivalents (balance sheet)

Goal: Figure out why Change In Cash and Cash Equivalents on the cash flow statement does not equal change in Cash And Cash Equivalents on the balance sheet. Example: Stock: DEO Period Ending: 6/...
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11answers
16k views

Is there any financial benefit to being paid bi-weekly over monthly?

I have read in many sources that it's generally better for an employee to be paid bi-weekly than monthly. I have been performing some calculations and can't see the benefit to this. Say I was on a $...
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3answers
285 views

How to manage paying expenses when moving to a weekly pay schedule and with a pay increase?

I'm terrible at managing my money. This is likely the cause for this entire issue. I'm being moved from a bi-weekly (1st and 15th of the month) pay schedule, to a weekly pay schedule. At the same ...