incremental cash flows

Incremental cash flows

Difference between the firm's cash flows with and without a project.

Incremental Cash Flows

The difference between a company's cash flow and its potential cash flow, should it undertake a certain project. That is, a company nets the potential cash flow from a project it is considering and subtracts its current cash flow in order to calculate the incremental cash flow. This is important in the risk analysis of a potential project; a negative incremental cash flow indicates that the project is likely not worth the risk. A positive incremental cash flow shows that, all other things being equal, the project may be beneficial for the company.

incremental cash flows

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Importantly, management teams that employ an aggressive maintenance capex definition cant hide for long because it will show up via rising leverage (Debt Less Cash-to-EBITDA) and/or reduced distribution coverage (DCF divided by Distributions) as capital outlays improperly labeled growth dont generate incremental cash flows.
We are very excited about the transaction which is expected to strengthen production profile, lower costs, and provide substantial incremental cash flows at Varvara in the near term.
In this investigation, the focus was on three such issues: (1) finite horizons, (2) incidental cash flows, and (3) incremental cash flows.
He added that, for CVS itself, the joint venture brings quantifiable incremental cash flows to the company over the next 10 years "and also the potential for savings down the road.
In that respect, premised on the second feasibility report submitted by MESB to the Government in January 2013 and latest available information, RAM has been made to understand that the Spur Link is to be viewed as a separate project to be funded via additional debt as well as incremental cash flows from the introduction of potentially 2 new toll-plazas.
Moreover, the data show that after acquisition, target firms save less cash out of incremental cash flows, and that the target firm's investments tend to be less correlated with cash flows.
This table displays relevant incremental cash flows as they were assessed at date t, and as they realized at date T.
The incremental cash flows expected from the real estate foray also add comfort to the rating.
They should have authorised a $1bn buyback and they would use incremental cash flows to fund it," Gabelli said.
Furthermore, Harbinger believes that the company's recently acquired online advergaming and online social shopping portal ventures have diverted management's attention away from the company's core businesses at a time when management's online strategy should instead serve to directly magnify the value, content and reach of its core television and newspaper properties and produce meaningful incremental cash flows," the proxy says.
The value of an IPR & D project includes the present value of probable incremental cash flows from the project.
It is commonplace in the finance literature that the appropriate method for acquirers seeking to value an acquisition is to identify the expected incremental cash flows from the merger.

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