The income statement provides a breakdown of sales and expenses, and these can be made or paid with either cash or credit. Because of certain accounting conventions aimed at matching sales and ...

Calculate the present value of each year's cash flow by dividing by (1 + discount rate)^number of years. Sum all present values to find the total value of projected cash flows, which in this example ...

The internal rate of return, or IRR, is the interest rate that provides a net present value, or NPV, of future cash flows equal to the initial investment amount. Flip that definition around, and the ...

Credit: By discounting every future $3,000 cash flow back at a rate of 10%, and subtracting the initial cash outlay of $15,000, we arrive at a net present value of $3,433.70 for this project. Under ...

Discretionary cash flow shows remaining funds after all obligations are met. It's calculated by adjusting pre-tax earnings with specific expenses and incomes. Understanding this can help buyers and ...

A lot of years ago, while I was frantically juggling lots of numbers for a new acquisition, analyzing EBITDA and every financial ratio I could think of, my boss approached me calmly and said, “I ...

Investors are very focused on IBM’s ability to generate cash flow since it has seen lower year over year revenue growth for the past 21 quarters (18 when adjusted for currency). With a market cap of ...

Shares of beleaguered retailer J.C. Penney slumped after the company reported a loss for the holiday quarter. While things are slowly improving at J.C. Penney, the company is still unprofitable, ...

Perhaps the best picture of a company's current finances, discretionary cash flow refers to the portion of revenue a company has left after all mandatory payments, such as wages, are paid, and all ...