Projecting cashflows

enough of these stupid coins, how do you project cash flows?

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Cash and cash-equivalent assets moving in and out of the business. I guess you could call it a liquid asset.

you literally have the best book to DYOR


Guess how much you’re going to sell ... make a chart ... fill it in ...


shit user I have the exact same book

alright so you need to project revenues (bottom-up)
based on the company's business model you can draw industry assumptions
ie: Hotel revenue is composed of Room Revenue, F&B Revenue, MICE (meetings, incentives, conferences, exhibitions) and others (could be concierge services, rental income from boutiques operating inside the property)

then come the direct costs or cost of revenues which is a % of revenue (check industry averages)

then come the operating expenses such as General and administrative expenses, marketing and sales expenses, property insurance etc...(these are non-variable expenses or overheads to the business)

by now you've included depreciation in both direct and operating expenses

deduct interest charges or expenses
deduct tax
arrive at net income
do this for at least 5 years (proforma profit or loss)

apply these outputs to the FCFF formula which has 4 different formats. depends which cash inflow proxy you decide to use (Net income, EBITDA, EBIT or Cash from operations-CFO-see indirect cash flow statement.

voila you get your 5 FCFF, include a terminal FCFF that is assumed to continue in perpetuity by applying the gordon constant growth model.

discount these using WACC
oh remember to add back costs of capital such as interest expenses

so you mention getting your assumptions by comparing to similar businesses right? isn't there a way to base it on the intrinsic value? or what about option pricing model valuation?

option pricing model, like black-scholes? this is corporate finance not derivatives!!!

corporate finance is similar to managerial accounting in that when you build your financial model it's about researching assumptions that affect your financial statements, put together notes to the financial statements and use those to build an income statement, balance sheet, statement of cash flows and statement of owner's or shareholders' equity. it's GAAP intensive and then switches to finance when you apply principals of time value of money (discounting)

the process of finding a relevant and attributable discount rate is cumbersome on its own

i want to learn to corporate finance so i can invest in companies.

oh! so that game is changing because forecasting quarterly earnings is becoming less influential. now the focus is on the acquisition of strategic assets. check out Tesla. no profit no dividends to shareholders. now check out the price growth. again look at Netflix. their balance sheet is filthy. check out it's performance. even equities are turning into a meme. stick to crypto or purchase ETFs: why invest in a single stock when you could invest in the entire sector

i miss this kind of threads
since the shitcoin hype, this board really went down the gutter

ok thanks a lot for helping me, i'm very new just trying to get my feet wet so forgive my stupidity. What i understand with tesla and netflix is that, they're projected to have a lot of growth so it's okay they have a lot of debt. I think im more interested in investing long term because it seems more reliable, but i would like to learn stuff like day trading too.

So is learning corporate finance necessary to learning how to invest good?

should i go to r/investing or stackexchange money? do you reccomend any other forums for learning to invest

these vids were actually very good


yeah i watch some of them, did you watch the whole thing?

i would advise not getting into equities for the next 12 months.

the current market is propped on cheap debt and expensive equity. could turn bearish soon. after the collapse the FED started printing money (quantitative easing) corporations took advantage of this cheap debt to buy back their stocks from the market in order to manipulate growth in their earnings per share and improve market multiples. also cheap oil helped because the saudis thought they were smart by pushing OPEC into a supply glut. lo and behold their strategy backfired and their economies are desperately seeking foreign direct investments. even oil rich sovereign states had to dip into the foreign debt capital market to balance their budgets.

so when the FED continues to hike rates, debt will become more expensive and credit markets will dry up. Over leveraged companies will eat shit first

you might want to pick up a book on investment analysis and portfolio management

for financial/mathematics/philosophical reads i would recommend Nassim Taleb's black swan and antifragile.

his books are tough to read but very enjoyable
i watched this video by ray dalio on how economies work. i'm not even thinking i will have any idea how to invest good within the next few years of learning. do you think it would be wise to short or buy put options since this is obviously not the time to long at such a high price?

stop trolling OP faggots

>buy one of these
>put cashflows on the flat surface
>projecting cashflows


fuck you that's hilarious


forecasting, projecting, samething