Performance evaluation, Financial Management

Performance evaluation

One can determine this by comparing the cash flow from assets and cost of capital.

1. Cash flow from assets

Cash flow from assets is calculated as Operating Cash flow - Net Capital Spending - Change in NWC.

        1. Operating Cash flow

            Operating Cash flow = Earnings before interest and taxes + depreciation - taxes

        2. Net capital spending 

            Net capital spending is money spent of fixed assets less money received from the sale of fixed assets.
           Net capital spending = Ending net fixed assets - Beginning net fixed assets + Depreciation

        3. Change in Net working capital

           Net working capital is difference between current assets and current liabilities. Change in net working capital is the difference            between net working capital between two years. 

Posted Date: 7/26/2012 3:55:35 AM | Location : United States







Related Discussions:- Performance evaluation, Assignment Help, Ask Question on Performance evaluation, Get Answer, Expert's Help, Performance evaluation Discussions

Write discussion on Performance evaluation
Your posts are moderated
Related Questions
1. Discuss and describe in your own words the five Cs of credit analysis. 2. Why is it difficult for an entrepreneur to finance a startup with debt? What are the dangers of cre

Explain the significance of the term additional funds needed. While the pro forma balance sheet is completed, total assets and total liabilities and equity will hardly match.

Zero base budgets: this is a new technique, which was first used by the US Department of Agriculture in 1961. Texas instruments, an MNC, have used it in the private sector.  But,

what is the major value of the weighted cost of capital calculation for the firm?

Explain the term "present value of the firm's operations" (also known as Enterprise Value ).  What does this number represent? The present value of the company's free cash flo

Q. In planning a restaurant, it is estimated that a revenue of $6 per seat will be realized if the number of seats is at most 50. On the other hand, the revenue on each seat will d

Example of Company Objectives Divide from the problem of which goal a company ought to pursue are the questions of which goals companies claim to pursue and which goals they a

what is the meaning of market feasibility? What are its different types with their degree?

Borrowing Funds to Purchase Bonds There are several sources available to borrow funds. When securities are purchased with borrowed funds then the mo

What is the primary assumption behind the experience approach to forecasting? The experience approach to forecasting is relies on the assumption that things will happen a fixed