Comment, question or quotation of the day

05-06-2020 : Quote of the day


“Stop yearning for what you don’t have, and you’ll ruin the economy.” 

Marcel Proust

               

04-06-2020 : Question from a follower of the Vernimmen.com Facebook page






  "When calculating the value of a business or the NPV of an investment, are negative cash flows also discounted? If so, what is the logic behind this discounting? Because normally when you discount a positive free cashflow by the WACC, it's to remunerate the capital providers, isn't it?"



 



We also discount negative cash flows. Indeed a negative flow corresponds to a financing need that will have to be found, but as it does not occur immediately, but later, it is normal that it is discounted, i.e. its present value is depreciated in relation to its nominal amount to take into account the fact that it is an advantage for us to have to spend this sum later, and not now.



 



Have a nice day. 





 



Glossary

The Vernimmen.com glossary provides definitions for a couple of thousands of financial, stock market or economic terms.
This financial dictionary allows beginners to progress in their learning of finance and to experts to cease the precise meaning of a sentence.

Quiz

The Vernimmen.com Quiz offers over 300 questions with answers to progress in your understanding of finance and to test your knowledge.
Questions are sorted by key topics (financial analysis, investment and stock markets, value, financial engineering and financial management).

Survey

We frequently ask our readers to give us their point of view on a specific topic.
You will find here the current survey with the to-date status of answers as well as past polls.

Financial data

Thanks to our partner Infinancial, we can offer on this page financial data on over 16 000 groups around the world.
Updated several times a year, this database offers information sometimes hard to find elsewhere (beta, …)



The Vernimmen.com Letter

Number 130 of June 2020

News : What's new and what's the same in the rankings of the world's largest market capitalizations since 2000

Statistics : Corporate income tax in the world

Research : Long-term relationships in bank loan agreements

Q&A : How does European law define companies in financial distress?