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Cash Flow Projection





METHODOLOGY


Projections can be made with varying levels of detail, but any cash flow projection for a business entails forecasting the income statement, balance sheet and cash flow statement. Crude projections can be created by simply plugging in what one considers a reasonable estimate for each line item, whereas more complex projections will have a number of drivers for each - for example, the projected revenues can be driven by separate volume and price development forecasts.


USES


A cash flow projection is an important input into Valuation of assets, Budgeting and determining appropriate Capital Structure s in LBOs and Leveraged Recapitalization s.


NOTES AND REFERENCES


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