Professional Documents
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Cash Flow
A cash
Irrelevant
A Cash
Cash Flow
groups of steps:
Estimating
expenses
Assemble into an income statement
Remember -- Accrual accounting is not
the same as cash basis accounting
depreciation
Estimate the life of the project
Determine terminal values for fixed
assets
Determine disposal values for working
capital
Construct the cash flow statement
Accounts Receivable:
This
occur in year 0
typically increase with increase in sales
inventory losses are fully deductible
often liquidated at a loss
Balances:
typically
occur in year 0
typically increase with increase in sales
liquidated at full value
Accounts Payable:
usually
Expenses:
associated
be depreciated
typically occur in year 0
only increases with additional
acquisitions
may be 1250 gain or loss on disposal
disposal gains and losses are fully taxable
Buildings:
either
Forecasting Sales
trend
analysis
study of potential purchasers
derived demand
other methods
Cost:
engineering
analysis
regression analysis -- fixed and variable
Forecasting
regression
Working Capital: