Highpower International plans to fund the equity purchase with cash on hand, expected future cash flow
, and if needed, approximately USD 2m in borrowings under existing credit arrangements.
* Income Approach values a business or asset based on its expected future cash flow
. When determining the business enterprise value, expected future cash flow
represents cash flow available to debt and equity holders.
Through the flow-of-funds identity and the capital accumulation equation, Larrain and Yo develop a present-value model that relates the market value of corporate assets to its expected future cash flow
. The relevant measure of cash flow is net payout, which is the sum of dividends, interest, and net equity and debt repurchases.
Under the WACC method, a valuation expert values the entire business by calculating the present value of expected future cash flow
, excluding only return of equity payments and payments relating to funding sources that pay interest (i.e., interest-bearing debt).
We regress changes in annual cash dividend levels against various control variables and a surrogate for both the earnings effect and the expected future cash flow
effects of LIFO adoption.
Key determinants of a business' value are: expected future cash flow
, income, net assets, depth of management, competition, customer base, and employee relations.
'Given our current public market equity valuation, our cash balance and expected future cash flow
generation, we will likely allocate additional capital to both share repurchases and debt repayment in the back half of 2019,' he concluded.
This was changed in FAS 96 to the recognition of deferred taxes on the balance sheet based on the expected future cash flow
impact of the deferral (albeit undiscounted).
The expected future cash flow
is calculated by multiplying the probability-weighted cash flow by the probability of each course of action, as follows:
* Tabular presentation of expected future cash flow
amounts and related contract terms categorized by expected maturity dates.
Unreal G/L (OCI) (150,000) Because intrinsic value equals the future cash to be received over the term of the cap, gain or loss on the cap would equal the cumulative change in expected future cash flow
. Therefore, to adjust cumulative OCI to the cumulative change in cash flow of the hedged transaction, the change in the cap that represents intrinsic value ($150,000) would be included in OCI, while the part of the change that represents a decrease in time value ($40,000) would be included in current earnings (P&L).
A question arises as to the frequency and appropriate level of detail required in scheduling out the expected future cash flow