自由现金流及价值外文翻译.docVIP

外文翻译 Free cash flow and valuation Material Source:The Analysis and Use of Financial Statements Author: Gerald I White The cash flow statement is indented to help predict the firm’s ability to sustain (and increase) cash from current operation. In doing so, the statement provides more objective information about: A firm’s ability to generate cash flows from operating Trends in cash flow components and consequences of invest and financing decision Management decision regarding such critical areas as financial policy (leverage), dividend policy, and investment for growth Neither the statement of cash flows nor the income statement alone contains sufficient information for decision making. (See Box 2-2 for some empirical evidence in this respect.) In come statement and balance sheet data must be combined with cash flows for insights into the firm’s ability to turn its assets into cash inflows, repay its liabilities, and generate positive return to shareholders. All three financial statements are needed to value the firm appropriately. An important but elusive concept often used in cash flow analysis is free cash flow. It is indented to measure the cash available to the firm for discretionary used after making all required cash outlays. The concept is widely used by analysts and in the fiancé literature as the basis for many valuation models. The basic elements required it calculate FCF are available from the cash flow statement. In the, however, the definition of FCF varies widely, depending on how one defines and discretionary uses. The basic definition used by many analysts is cash from operations less the amount of capital expenditures required to maintain the firm’s present productive capacity. Discretionary uses include growth-oriented capital expenditures and acquisitions, debt reduction, and payments to stockholders (dividends and stock repurchase).the larger the firm’s FCF, the healthier it is, because it has more cash available for growth,