{"id":16093,"date":"2013-05-03T14:15:46","date_gmt":"2013-05-03T08:45:46","guid":{"rendered":"http:\/\/vskills.in\/certification\/tutorial\/?p=16093"},"modified":"2024-04-12T14:14:47","modified_gmt":"2024-04-12T08:44:47","slug":"cash-flow-valuation-process-2","status":"publish","type":"page","link":"https:\/\/www.vskills.in\/certification\/tutorial\/cash-flow-valuation-process-2\/","title":{"rendered":"Cash Flow Valuation Process"},"content":{"rendered":"<p><strong>Cash Flow Valuation Process<\/strong><\/p>\n<p>Cash flow valuation is the process of finding the value of money over different time periods. The process is based on the concept of time value of money, which is one of the most universally useful concepts in finance because the formulas can be used to find the value of any asset where you are expected to receive money in the future, including: bonds, stocks, lottery winnings, structured legal setlements, businesses, and web sites. In order to learn how to value cash flow, you will have to learn other financial concepts. For those who are having calculus flashbacks, don&#8217;t worry, I&#8217;ll try to make this as easy as possible<\/p>\n<div id=\"node-122135\" role=\"article\">\n<div>\n<ul>\n<li><strong>Project Future Cash Flows<\/strong>\u00a0&#8211; this is usually done from a 3-statement projection model or by using simple assumptions about Revenue, Tax, Depreciation, Amortization etc and calculating\u00a0free cash flow\u00a0from there<\/li>\n<li><strong>Calculate the Discount Rate<\/strong>\u00a0&#8211; this is either taken to be a simple percentage or is calculated using\u00a0WACC<\/li>\n<li><strong>Discount Future Cash Flows<\/strong>\u00a0&#8211; either by using the Mid-Year discount or a simple discount period, it is fairly simple to calculate the present value of future cash flows<\/li>\n<li><strong>Estimate Terminal Value<\/strong>\u00a0&#8211; Terminal Value is then estimated either by using a terminal exit multiple (usually an\u00a0EBITDA\u00a0multiple) or with a Terminal Growth Rate (Gordon GrowthMethod)<\/li>\n<li><strong>Find the Net Present Value<\/strong>\u00a0&#8211; to find the net present value simply discount the terminal value (again using\u00a0WACC\u00a0or a simple %) and then add that to the sum of the discounted cash flow values<\/li>\n<\/ul>\n<div class=\"apply\">\n<h3>Apply for Equity Research Certification Now!!<\/h3>\n<p><a href=\"http:\/\/www.vskills.in\/certification\/Certified-Equity-Research-Analyst\">http:\/\/www.vskills.in\/certification\/Certified-Equity-Research-Analyst<\/a><\/p>\n<h4><a href=\"https:\/\/www.vskills.in\/certification\/tutorial\/certified-equity-research-analyst\/\"><strong>Back to Tutorials<\/strong><\/a><\/h4>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Cash Flow Valuation Process Cash flow valuation is the process of finding the value of money over different time periods. The process is based on the concept of time value of money, which is one of the most universally useful concepts in finance because the formulas can be used to find the value of any&#8230;<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"categories":[3331],"tags":[4080,4077,4074,4081,4078,4082,4083,4079,4076],"class_list":["post-16093","page","type-page","status-publish","hentry","category-equity-research","tag-calculate-the-discount-rate","tag-cash-flow","tag-cash-flow-valuation-process","tag-discount-future-cash-flows","tag-discounted-cash-flow","tag-estimate-terminal-value","tag-find-the-net-present-value","tag-project-future-cash-flows","tag-valuation-process"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Cash Flow Valuation Process - Tutorial<\/title>\n<meta name=\"description\" content=\"Cash Flow Valuation Process. 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