New Definition of Cash Flows Could Revolutionize Firm Valuation Methods!
The article clarifies how to correctly calculate the cash flows needed to value a company. It emphasizes the importance of including specific items in these cash flows and explains why they are essential. The main focus is on whether certain funds in the Balance Sheet should be considered part of the free cash flow and cash flow to equity. By using a practical example, the article demonstrates how financial statements reflect implicit financial information related to this practice.