In: Finance
How can we calculate the value of an entire firm?
Check all that apply:
As all future cash inflows minus outflows
As all future revenue
As the sum of outstanding stocks and liabilities
As all future net earnings
Option 1 - Select
The value of the company can be identified by discounting all the firm's future cash inflows subtracting the cash inflows, which will help to determine the present net worth of the company.
Option 2: Select
The company's future sales revenue is used to calculate the value of the company, it is multiplied by the percentage the company can grow in the future, which bring the value of the company.
Option 3: Select
The company's total market capitalisation which is the value of equity and total debt is used to calculate the value of the company because this is the total capital of the firm has to finance the assets.
Option 4:Select
The company's net earning is used to determine the profit the company is generating to shareholders, it gives the picture of how well the company is performing , The sum of all the future earnings is the free cash flow available to the shareholders, therefore, it is used to calculate the value of the company.