Introduction to Discounted Cash Flow Analysis and Financial Functions in Excel

The financial and economic analysis of investment projects is typically carried out using the technique of discounted cash flow (DCF) analysis. This module introduces concepts of discounting and DCF analysis for the derivation of project performance criteria such as net present value (NPV), internal rate of return (IRR) and benefit to cost (B/C) ratios. These concepts and criteria are introduced with respect to a simple example, for which calculations using MicroSoft Excel are demonstrated.

JEFFI [microform] : a simplified, Lotus-based cash flow analysis program /

"July 1993"--P. [2] of cover.

Analysis of purchasing activity with discounted cash flow inventory models = Beszerzési tevékenység elemzése diszkontált pénzáramlású készletmodellel

A klasszikus tételnagyság probléma két fontosabb készletezési költséget ragad meg: rendelési és készlettartási költségek. Ebben a dolgozatban a vállalatok készpénz áramlásának a beszerzési tevékenységre gyakorolt hatását vizsgáljuk. Ebben az elemzésben a készpénzáramlási egyenlőséget használjuk, amely nagyban emlékeztet a készletegyenletekre. Eljárásunkban a beszerzési és rendelési folyamatot diszkontálva vizsgáljuk. A költségfüggvény lineáris készpénztartási, a pénzkiadás haszonlehetőség és lineáris kamatköltségből áll. Bemutatjuk a vizsgált modell optimális megoldását. Az optimális megoldást egy számpéldával illusztráljuk. = The classical economic order quantity model has two types of costs: ordering and inventory holding costs. In this paper we try to investigate the effect of purchasing activity on cash flow of a firm. In the examinations we use a cash flow identity similar to that of in inventory modeling. In our approach we analyze the purchasing and ordering process with discounted costs. The cost function of the model consists of linear cash holding, linear opportunity cost of spending cash, and linear interest costs. We show the optimal solution of the proposed model. The optimal solutions will be presented by numerical examples.

Does direct cash flow presentation help in predicting future operating cash flow?

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Finance from the NOVA – School of Business and Economics

Does direct cash flow presentation help in predicting future operating cash flow?

Research literature and regulators are unconditional in pointing the disclosure of operating cash flow through direct method a section of unique information. Besides the intuitive facet, it is also consistent in forecasting future operating cash flows and a cohesive piece to financial statement puzzle. Bearing this in mind, I produce an analysis on the usefulness and predictive ability on the disclosure of gross cash receipts and payments over the disclosure of reconciliation between net income and accruals for two markets with special features, Portugal and Spain. Results validate the usefulness of direct method format in predicting future operating cash flow. Key

Development of project cash flow forecasting process

Process management refers to improving the key functions of a company. The main functions of the case company - project management, procurement, finance, and human resource - use their own separate systems. The case company is in the process of changing its software. Different functions will use the same system in the future. This software change causes changes in some of the company’s processes. Project cash flow forecasting process is one of the changing processes. Cash flow forecasting ensures the sufficiency of money and prepares for possible changes in the future. This will help to ensure the company’s viability. The purpose of the research is to describe a new project cash flow forecasting process. In addition, the aim is to analyze the impacts of the process change, with regard to the project control department’s workload and resources through the process measurement, and how the impacts take the department’s future operations into account. The research is based on process management. Processes, their descriptions, and the way the process management uses the information, are discussed in the theory part of this research. The theory part is based on literature and articles. Project cash flow and forecasting-related benefits are also discussed. After this, the project cash flow forecasting as-is and to-be processes are described by utilizing information, obtained from the theoretical part, as well as the know-how of the project control department’s personnel. Written descriptions and cross-functional flowcharts are used for descriptions. Process measurement is based on interviews with the personnel – mainly cost controllers and department managers. The process change and the integration of two processes will allow work time for other things, for example, analysis of costs. In addition to the quality of the cash flow information will improve compared to the as-is process. Analyzing the department’s other main processes, department’s roles, and their responsibilities should be checked and redesigned. This way, there will be an opportunity to achieve the best possible efficiency and cost savings.

Discounted cash flow: accounting for uncertainty

Valuation is the process of estimating price. The methods used to determine value attempt to model the thought processes of the market and thus estimate price by reference to observed historic data. This can be done using either an explicit model, that models the worth calculation of the most likely bidder, or an implicit model, that that uses historic data suitably adjusted as a short cut to determine value by reference to previous similar sales. The former is generally referred to as the Discounted Cash Flow (DCF) model and the latter as the capitalisation (or All Risk Yield) model. However, regardless of the technique used, the valuation will be affected by uncertainties. Uncertainty in the comparable data available; uncertainty in the current and future market conditions and uncertainty in the specific inputs for the subject property. These input uncertainties will translate into an uncertainty with the output figure, the estimate of price. In a previous paper, we have considered the way in which uncertainty is allowed for in the capitalisation model in the UK. In this paper, we extend the analysis to look at the way in which uncertainty can be incorporated into the explicit DCF model. This is done by recognising that the input variables are uncertain and will have a probability distribution pertaining to each of them. Thus buy utilising a probability-based valuation model (using Crystal Ball) it is possible to incorporate uncertainty into the analysis and address the shortcomings of the current model. Although the capitalisation model is discussed, the paper concentrates upon the application of Crystal Ball to the Discounted Cash Flow approach.

A cash flow-kimutatás szabályozásainak nemzetközi összehasonlítása és csoportosítása (International comparison and classification of Cash Flow Statement regulations)

Az egyes nemzetek számviteli szabályozásának vizsgálatánál az adott ország sajátosságaiból eredően részben eltérő szabályozások alakultak ki. Az induktív megközelítésű vizsgálatok jellemzően a szabályozási kérdések széles körét fogják át, de csak néhány tényező mentén közelítve. A cash flow-kimutatások témakörénél a legtöbbször csak azt nézték, hogy van-e előírás a kimutatás elkészítésére, de a részletekkel már kevésbé foglalkoztak. Ebből adódóan e területen viszonylag kis különbséget mutattak ki ezek a felmérések. A szerző kutatása szerint a nemzeti cash flow-kimutatások szabályozásának részleteiben eltérések tapasztalhatók, és ezek alapján a nemzetek klaszterelemzéssel hierarchikusan csoportokba rendezhetők. _____ Research has found that as a result of their particularities, different countries have established partly different accounting frameworks. Studies with inductive approaches typically encompass a wide range of regulatory issues, but based on a limited number of factors only. In the case of Statements of Cash Flows, most studies have so far only examined the existence of rules governing the presentation of the statement, without an in-depth analysis of the details. Therefore, these studies only found relatively minor differences in this field. The author’s research shows that many differences exist in the details of national Cash Flow Statement regulations, which makes it possible to classify the countries in groups using the method of hierarchical clustering.

An Environmental Friendly Procedure for Photometric Determination of Hypochlorite in Tap Water Employing a Miniaturized Multicommuted Flow Analysis Setup

A photometric procedure for the determination of ClO(-) in tap water employing a miniaturized multicommuted flow analysis setup and an LED-based photometer is described. The analytical procedure was implemented using leucocrystal violet (LCV; 4,4', 4 ''-methylidynetris (N, N-dimethylaniline), C(25)H(31)N(3)) as a chromogenic reagent. Solenoid micropumps employed for solutions propelling were assembled together with the photometer in order to compose a compact unit of small dimensions. After control variables optimization, the system was applied for the determination of ClO(-) in samples of tap water, and aiming accuracy assessment samples were also analyzed using an independent method. Applying the paired t-test between results obtained using both methods, no significant difference at the 95% confidence level was observed. Other useful features include low reagent consumption, 2.4 mu g of LCV per determination, a linear response ranging from 0.02 up to 2.0 mg L(-1) ClO(-), a relative standard deviation of 1.0% (n = 11) for samples containing 0.2 mg L(-1) ClO(-), a detection limit of 6.0 mu g L(-1) ClO(-), a sampling throughput of 84 determinations per hour, and a waste generation of 432 mu L per determination.

Single interface flow analysis with accuracy assessment

Single interface flow systems (SIFA) present some noteworthy advantages when compared to other flow systems, such as a simpler configuration, a more straightforward operation and control and an undemanding optimisation routine. Moreover, the plain reaction zone establishment, which relies strictly on the mutual inter-dispersion of the adjoining solutions, could be exploited to set up multiple sequential reaction schemes providing supplementary information regarding the species under determination. In this context, strategies for accuracy assessment could be favourably implemented. To this end, the sample could be processed by two quasi-independent analytical methods and the final result would be calculated after considering the two different methods. Intrinsically more precise and accurate results would be then gathered. In order to demonstrate the feasibility of the approach, a SIFA system with spectrophotometric detection was designed for the determination of lansoprazole in pharmaceutical formulations. Two reaction interfaces with two distinct pi-acceptors, chloranilic acid (CIA) and 2,3-dichloro-5,6-dicyano-p-benzoquinone (DDQ) were implemented. Linear working concentration ranges between 2.71 x 10(-4) to 8.12 x 10(-4) mol L(-1) and 2.17 x 10(-4) to 8.12 x 10(-4) mol L(-1) were obtained for DDQ and CIA methods, respectively. When compared with the results furnished by the reference procedure, the results showed relative deviations lower than 2.7%. Furthermore. the repeatability was good, with r.s.d. lower than 3.8% and 4.7% for DDQ and CIA methods, respectively. Determination rate was about 30 h(-1). (C) 2009 Elsevier B.V. All rights reserved.

Cadmium telluride nanocrystals as luminescent sensitizers in flow analysis

A fully automated multipumping flow system (MPFS) using water-soluble CdTe quantum dots (QD) as sensitizers is proposed for the chemiluminometric determination of the anti-diabetic drugs gliclazide and glipizide in pharmaceutical formulations. The nanocrystals acted as enhancers of the weak CL emission produced upon oxidation of sulphite by Ce(IV) in acidic medium, thus improving sensitivity and expanding the dynamical analytical concentration range. By interacting with the QD, the two analytes prevented their sensitizing effect yielding a chemiluminescence quenching of the Ce(IV)-SO(3)(2-)CdTe QD system. The pulsed flow inherent to MPFS assured a fast and efficient mixing of all solutions inside the flow cell, circumventing the need for a reaction coil and facilitating the monitoring of the short-lived generated chemiluminescent species. QD crystal size, concentration and spectral region for measurement were investigated. (C) 2011 Elsevier B.V. All rights reserved.

Zone trapping/merging zones in flow analysis: A novel approach for rapid assays involving relatively slow chemical reactions

A novel strategy for accomplishing zone trapping in flow analysis is proposed. The sample and the reagent solutions are simultaneously inserted into convergent carrier streams and the established zones merge together before reaching the detector, where the most concentrated portion of the entire sample zone is trapped. The main characteristics, potentialities and limitations of the strategy were critically evaluated in relation to an analogous flow system with zone stopping. When applied to the spectrophotometric determination of nitrite in river waters, the main figures of merit were maintained, exception made for the sampling frequency which was calculated as 189h(-1), about 32% higher relatively to the analogous system with zone stopping. The sample inserted volume can be increased up to 1.0 mL without affecting sampling frequency and no problems with pump heating or malfunctions were noted after 8-h operation of the system. In contrast to zone stopping, only a small portion of the sample zone is halted with zone trapping, leading to these beneficial effects. (C) 2011 Elsevier B.V. All rights reserved.

Gas flow analysis in a Kraft recovery boiler

Demands for optimal boiler performance and increased concerns in lowering emission have always been the driving force in the reevaluation and evolution of the Kraft boiler: specifically the air distribution strategies that are directly related to achieving increased residence time of flue gas combustion inside the furnace which in turn lowers atmosphere emission levels and enhances boiler operation. This paper presents the results of a study that analyzes the interaction of the different multilevel air injections have on flue gas flow patterns including various quaternary air supply arrangements. Additionally, this study assesses the performance of the CFD (Computational Fluid Dynamics) model against data available in literature. Simulations were performed considering isothermal and incompressible flows, and did not take into account thermal phenomena or chemical reactions. The numerical solutions generated proved to be coherently related to the data available in literature, and provided proof of the efficiency of tertiary level air injection, as well as revealed that quaternary air injection ports arranged in a symmetrical configuration is most suitable for optimal equipment operation. (C) 2010 Elsevier B.V. All rights reserved.

Reconciling value estimates from the discounted cash flow model and the residual income model

This paper examines why practitioners and researchers get different estimates of equity value when they use a discounted cash flow (CF) model versus a residual income (RI) model. Both models are derived from the same underlying assumption -- that price is the present value of expected future net dividends discounted at the cost of equity capital -- but in practice and in research they frequently yield different estimates. We argue that the research literature devoted to comparing the accuracy of these two models is misguided; properly implemented, both models yield identical valuations for all firms in all years. We identify how prior research has applied inconsistent assumptions to the two models and show how these seemingly small errors cause surprisingly large differences in the value estimates. [ABSTRACT FROM AUTHOR]