Corporate Financial Analysis in Value Assessment: An Empirical Study Based on the Cash Flow Analysis Method
Journal: Modern Economics & Management Forum DOI: 10.32629/memf.v6i1.3561
Abstract
Corporate valuation plays a pivotal role in strategic decision-making, particularly in investment, mergers, and acquisitions. This study focuses on the application of cash flow analysis in value assessment, emphasizing its relevance and adaptability across diverse industries. By analyzing financial data and case studies, it demonstrates how cash flow metrics such as Free Cash Flow and Operating Cash Flow provide a realistic and forward-looking measure of a company’s financial health. The findings highlight the strengths of cash flow analysis in dynamic and stable sectors, while addressing challenges like data reliability and forecasting uncertainties. The study also advocates for integrating qualitative insights, such as management quality and market trends, to enhance the depth and accuracy of valuation. Practical recommendations for practitioners and directions for academic research are provided, emphasizing the need for innovation and collaboration in advancing valuation methodologies.
Keywords
corporate valuation; cash flow analysis; free cash flow; operating cash flow; discounted cash flow
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[3] Kustinah S. Funding Analysis, Company Cash Flow Statement and Its Effect on Banking Firm Value[J]. International Journal of Science and Society, 2020, 2(1): 414-427.
[4] Yordanova-Dinova P. Theoretical and Methodological Approaches in the Analysis of the Cash Flows[J]. 2020.
[5] Istianah, Haliah, Andi Kusumawati. Operating Cash Flow Analysis as a Financial Performance Measurement Tool[J]. Formosa Journal of Multidisciplinary Research, 2023, 2(10): 1645-1654.
[6] Çiftci H. N, Kuzu Yıldırım S, Yıldırım B. F. Analysis of Financial Performances Based on Cash Flow Ratios using Combined Compromise Solution Method: An Application on Energy Companies Traded in BIST[J]. Muhasebe ve Finansman Dergisi, 2021, (92): 207-224.
[7] Jiang D. Investment Analysis Report based on the Application of Free Cash Flow Valuation Method (FCFF)--Take Three Squirrels for Example[J]. Scientific Journal of Economics and Management Research, 2024, 6(4).
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