growth strategy due to high competition. Future Prospects AIRTEL Airtel plans to set up 3000 more towers to enhance their rural coverage and will now focus on rural and semi-urban areas RCOM Peak investment phase is over. RCOM continues to be free cash flow positive and this trend to continue in succeeding years. BUYERS: The individual buyers don’t have any competition among themselves but enterprise customers like IT or banks do have. Enterprise customers generate major part of the revenues for
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another factor in ITW’s share price. Last year in August‚ ITW increased their quarterly dividend by 18% to $0.65 per share‚ and the company is set-up to make a similar dividend growth this month. Its free cash generation potential is almost 100% to net income. With a strong growth in earnings‚ its free cash flows will also increase at a similar rate. This will create a room for dividend growth. Overall‚ I suggest long-term defensive investors add a robust player like Illinois Tool Works to their portfolio
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THE ELEMENTS OF A CASH FLOW PROJECTION A capital budgeting decision is characterized by costs and benefits (cash flows) that are spread out over several time periods. This leads to a requirement that the time value of money be considered in order to evaluate the alternatives correctly. Although in actual practice we must consider risk as well as time value‚ to situations in which the costs and benefits (in terms of cash) are known with certainty. There are sufficient difficulties in just taking
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7 – Discounted Cash Flow Techniques page 247 A brief tutorial on Excel financial functions (problems to follow) You may find the following Excel‚ built-in financial functions helpful when analyzing the problems below. (To access these functions‚ select Insert‚ Functions‚ and choose Financial.) =PV(rate‚ nper‚ pmt‚ fv‚ type) returns the present value of a series of cash flows. =FV(rate‚ nper‚ pmt‚ pv‚ type) returns the future value of a series of cash flows. =PMT(rate
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year ended December 31‚ 2010. Cash received from lenders $20‚000 Cash received from customers 60‚000 Cash paid for new equipment 35‚000 Cash dividends paid 8‚000 Cash paid to suppliers 18‚000 Cash balance 1/1/10 12‚000 Hint: Prepare a statement of cash flows. (SO 5) Instructions • Prepare the 2010 statement of cash flows for Damon Corporation. • Suppose you are one of Damon’s creditors. Referring to the statement of cash flows‚ evaluate Damon’s ability to repay
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present value of the asset’s expected future cash flows. SECURITY VALUATION In general‚ the intrinsic value of an asset = the present value of the stream of expected cash flows discounted at an appropriate required rate of return. Can the intrinsic value of an asset differ from its market value? Ct = cash flow to be received at time t. k = the investor’s required rate of return. V = the intrinsic value of the asset. BOND VALUATION Discount the bond’s cash flows at the investor’s required rate of return
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paying cash‚ manufacturing the product‚ selling the product and collecting cash. During the payment‚ the cash need occurs. Cash need should be covered by going into a debt. Cash budget is a primary tool in short-term financial planning. It is prepared after the operating budgets (sales‚ manufacturing expenses or merchandise purchases‚ selling expenses‚ and general and administrative expenses) and the capital expenditures budget are prepared. The cash budget starts with the beginning cash balance
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Writing Assignment Week 1 Question 2.2 – Accounting and Cash Flows: Why is it that the revenue and cost figures shown on a standard income statement may not be representative of the actual cash inflows and outflows that occurred during a period? Financial Statements are prepared according to accrual rule of ‚ according to which cost and revenue are recorded as they occur and not when they are actually received or paid. This is why cash flows during the year may be different from revenue and costs
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computed free cash flow without late fees for 2002-2004 and projected 2005. 2004 2003 2002 2005(projected) Original OCF 1215.4 1430.3 1462.3 593 Less: EVF (622.4) (722.1) (739.5) 0 Adjusted OCF 593 708.2 722.8 593 Original ICF (1112.3) (1024.6) (1314.6) (1112.3) Original FCF (18.8) (335.5) (199.2) (18.8) Beginning balance & exchange rate effects 233.4+12.6 152.5+10.7 200.2+3.8 330.3+12.6 Free Cash Flow w/o EVF (292.1) (488.7) (587) (195.2) Free Cash
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Free Flow Layout Free flow layout is an irregular arrangement of retail setting that encourages a formless traffic flow. It is mainly used in stores which have wide range of products. Easy to navigate and display to another were one of the major characteristics of free flow layout. Compare to the other retail layout‚ free flow layout had no particular display pattern. All the fixtures and products were grouped and located in flowing patterns on the sales floor. This layout usually used in stores
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