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(discounted cash flows valuation and application (Example (pure discount…

- - - - EAR
      - APR
- - - - sales growth assumption
      - operating at full capacity
        
        less than full capacity
      - EFN (difference)
  - - - using internally generated funds and issuing debt to maintain a constant debt ratio
- - - - net working capital
      - liquidity
    - - marginal tax rates
      - average tax rates
- - - - CF to creditors = interest paid - net new borrowing(new debt issued - existing debt reduced or changes in the LT debt)
      - CF to stockholders = dividends paid - net new equity raised or changes in common stocks and paid-in surplus
    - - OCF=EBIT+Depn-Tax
      - NCS= ending fixed assets - beginning net fixed assets + depn
      - changes in NWC = ending NWC - beginning NWC
- - - - profit margin = operating efficiency (how well does it controls costs)
      - total asset turnover = the firm's asset use efficiency (how well does it manage its assets)
      - equity multiplier = financial leverage (usage of debt)