Initial Cash Flow

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Dictionary Says

Definition of 'Initial Cash Flow'

The amount of money paid out or received at the start of a project or investment. This is generally a negative amount because projects often require a large initial capital investment by a company that will generate positive cash flow over time.

Investopedia Says

Investopedia explains 'Initial Cash Flow'

During the capital budgeting process, the attractiveness of a project is evaluated based on the cash flows generated by the project over its life. Using discounted cash flow analysis, the project's future value of the cash flows over its life are brought back to the present value to determine whether it is worthwhile for the company to pursue the project. Because the initial outlay is made at the start of the project (time zero), it isn't discounted.

For example, an oil company evaluating the attractiveness of a new refinery may budget for an initial outlay of $100 million to get the project started. This is then evaluated along with the future cash flows the project will generate over its life.
Search results for

'Initial Cash Flow'

  • Evaluate Stock Price With Reverse-Engineering DCF

    http://www.investopedia.com/articles/fundamental-analysis/09/reverse-discount-cash-flow.asp
    ... (To follow along in the example, use this DCF Template.) Take the inputs that are
    already known: $5 million in initial free cash flow, 100 million shares, 3 ...

  • Analyzing The Price-To-Cash-Flow Ratio

    http://www.investopedia.com/articles/stocks/11/analyzing-price-to-cash-flow-ratio.asp
    ... Value Analysis Once the P/CF ratio is calculated, the initial result does not ... A low
    free-cash-flow price multiple may be unattractive for an established slow ...

  • The Ups And Downs Of Initial Public Offerings

    http://www.investopedia.com/articles/financial-theory/11/upside-downside-of-ipos.asp
    ... Going public – an initial public offering of stock – can be an effective ... reading
    of these reports can accurately determine a company's cash flow and credit ...

  • An Introduction To Corporate Valuation Methods

    http://www.investopedia.com/articles/financial-theory/11/corporate-project-valuation-methods.asp
    ... presents itself when the cash flow streams from a project are unconventional, meaning
    that there are additional cash outflows following the initial investment. ...

  • CFA Level 1 Study Guide - Corporate Finance - Cash Flow and NPV ...

    http://www.investopedia.com/exam-guide/cfa-level-1/corporate-finance/cash-flow-npv-net-present-value-applications.asp
    ... 6.18 Revenue Recognition Effects on Cash Flows and Financial Ratios; 6.19
    The Cash Flow Statement; 6.20 Cash Flow Statement Basics; ...

  • Spotting Cash Cows

    http://www.investopedia.com/articles/stocks/05/cashcow.asp
    ... translate into recurring revenues, high profit margins and robust cash flow. ... for
    growth) often generate more free cash since the initial capital outlay ...

  • Valuing Firms Using Present Value Of Free Cash Flows

    http://www.investopedia.com/articles/fundamental-analysis/11/present-value-free-cash-flow.asp
    ... DDM) and FCFE model allow for two distinct phases of growth: an initial finite period ...
    In each case the cash flow is discounted to the present dollar amount and ...

  • Financial Statements: Earnings | Investopedia

    http://www.investopedia.com/university/financialstatements/financialstatements4.asp
    ... a reporting period like a fiscal year or a fiscal quarter, the cash flow typically
    will ... expense ($1 million per year x 10 years) equals the initial cash outlay ...

  • CFA Level 1 Study Guide - Securities Markets - Buying on Margin ...

    http://www.investopedia.com/exam-guide/cfa-level-1/securities-markets/buying-on-margin-maintenance-margin.asp
    ... 6.18 Revenue Recognition Effects on Cash Flows and Financial Ratios; 6.19
    The Cash Flow Statement; 6.20 Cash Flow Statement Basics; ...

  • CFA Level 1 Study Guide - Corporate Finance - Applying NPV ...

    http://www.investopedia.com/exam-guide/cfa-level-1/corporate-finance/applying-npv-net-present-value-project-decisions.asp
    ... 6.18 Revenue Recognition Effects on Cash Flows and Financial Ratios; 6.19
    The Cash Flow Statement; 6.20 Cash Flow Statement Basics; ...

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