Questions tagged [cash-flow]
The cash-flow tag has no usage guidance.
91 questions
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Exercise on capital budgeting
Consider a project of buying a new machine with several assumptions. The exercise is to compute the NPV and see if the project is worth it.
When doing capital budgeting like this, do we always ...
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Retained earnings in balance sheet, income statement and cashflow statement
Why don't the change in retained earnings in balance sheets match with the retained earnings calculated by Income statement and Statement of Cash Flows. Is there anything I am missing here?
Difference ...
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How do you determine the price at which it's better to sell this asset instead of renting it out?
Let's say you own a parking space. You have two options:
You can rent out the parking space for $1,000/month. It seems fair to assume that the rent will keep pace with inflation, which we'll call 2% ...
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Why do these two formulas for free cash flow differ?
I am working through a chapter on the cash flow statement of "Fundamental Analysis for dummies" while at the same time running some of the formulas on a real life example of one company's ...
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Why does NPV correspond to "cash in our pockets now" for risky investments?
For a positive NPV project with risk free cash flows and assuming access to a competitive money market, it is trivial to show (by appropriately borrowing or lending at the risk-free rate) that the ...
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How can I compare the value of a cash discount vs. an installment plan?
In Europe, retailers commonly offer cash discounts for up-front payment, as well as interest-free installment plans.
For example, if I'm making a €10,000 purchase, I could pay today and receive a 10% ...
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Why is the "cash flow statement" a thing? (It seems it can be deduced from the balance sheet and income statement anyway?)
The question is basically in the title.
From what I see, once I have the balance sheet and income statement, I already have everything I need about my business. From what I've seen, when creating the ...
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wrong net cash flow in the webpage or not?
net cash flow was defined as sum of operating cash flow and investing cash flow and financing cash flow in the webpage: https://stockanalysis.com/stocks/adbe/financials/cash-flow-statement/.
The raw ...
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How to simply calculate the free cash flow?
The simple way to calculate is to subtract a business's capital expenditures from its operating cash flow.
free cash flow
free cash flow = operating cash flow - capital expenditures
I have got adbe's ...
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I cannot calculate this because I don't have the discount rate
What is the NPV of the following investment? Upfront, it requires an investment of 1598. Then, it generates a cash flow of 774 after one year, 659 after two years, and 623 after three years. After ...
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Can I switch my car lease to prepaid?
My financial circumstances have recently changed, and as a result my cash flow is slightly negative. I have a car lease but I also have enough saved that I could prepay the remaining payments on the ...
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I've already filed my personal income taxes but didn't file my schedule E along with it
I have an out of state investment property that's under my name that I rent out to a tenant. I did my personal income taxes through Turbo Tax for free and during the process, it asked about any ...
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Intrinsic value of a stock which pays out dividend
I want to find the intrinsic value of a stock which pays out dividend but not a significant amount.
In particular, is there a way to incorporate the dividend payout in the discounted cash flow ...
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Cash flow statement and depreciation [closed]
Why is the depreciation included in the operating cash flow (OCF) rather than the investing cash flow (ICF) section of a cash flow statement (indirect method)?
I haven't found the source from the ...
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How exactly can I benefit from straight line depreciation on my property?
I have a rental property and have been reading heavily about straight line depreciation but I'm not quite grasping what it is and how I can benefit from my $4,092.92 deduction come tax season? After ...
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To what extent do funds used to purchase stock transfer to the company who's shares are being purchased? [duplicate]
Obviously when buying shares from a public offering, those funds are basically going to the corporation making the offering; that's the whole point. So for this question we are discussing the ...
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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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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