AVALIAÇÃO FINANCEIRA ATRAVÉS DA FERRAMENTA VALUATION, PELO MÉTODO DO FLUXO DE CAIXA DESCONTADO, NO BANCO DE CAPITAL ABERTO ITAÚ UNIBANCO HOLDING S.A

The valuation process of companies is essential for investors to estimate the fair value of a company. Once it has been established, it is possible to compare with the market value and thus judge whether an asset is cheap, fair or expensive. There are several methodologies for calculating the valuation of a company, among which the following stand out: method of market multiples; discounted cash flow method; method based on the book value. In this sense, the present work aims to evaluate the fair price of the shares of Itaú Unibanco bank (ITUB4) through the discounted cash flow method. For this, data about the company were used from the balance sheet and the statement of income for the year, made available on the internet by the bank. After these data analyzes and the establishment of some assumptions, the cash flow for the next 10 years was projected. From this, the flows were brought to present value, to calculate the fair price of the company's shares, using an appropriate discount rate. As a final result, the model indicates that the shares are undervalued by the market, that is, they are cheap and with a growth potential of 32%.

Intergenerational Transgressions in the Context of Changes in the Value of Human Capital in an Organization

The article analyzes the influence of intergenerational transgressions on changes in the value of human capital in an organization. It uses the historical cost method as well as the discounted cash flow method, proposing a prior methodical approach with their application. Also considered is the impact of risk on the increase or decrease in value and adequate personal strategies are addressed.

The Frozen Supply Chain Business Case: A Management Accounting Instructional Resource

This case guides students through the process of preparing a real-life business case. The business case involves capital expenditure analysis for a potential project in the Wally-Mart Supermarkets frozen supply chain. There are three parts to the business case: (1) prepare a financial model in Excel with a discounted cash flow method, to analyze relevant incremental capital expenditures, revenues, costs and profits; (2) concisely communicate the financial model and business case in a business style Word report, and (3) concisely communicate the financial model and business case in a business style PowerPoint presentation. The case materials include a practice financial modeling exercise. The case is suitable for use in undergraduate and graduate management accounting courses.

Economic technology analysis of LTE advanced pro dual spectrum licensed and unlicensed access using discounted cash flow methods

<p>Since implementing the long term evolution (LTE) technology, the surge in data service traffic has increased, causing an increase in demand spectrum, which has resulted in gaps in capacity requirements. Wireless service providers can respond to LTE technology updates. With LTE advanced pro technology that utilizes unlicensed spectrum technology can provide solutions to increase capacity and throughput. In this study, LTE advanced pro planning by capacity method to find the number of eNodeB and using the discounted cash flow method to analyze the feasibility of the costs to be invested in the implementation of the LTE. The results of the four simulated scenarios concluded that the number of eNodeB from the IV scenario with 20 MHz bandwidth at 1800 MHz frequency and 20 MHz bandwidth at 5 GHz frequency amounted to 23 sites, with a positive NPV value of $ 271,936.96, IRR of 14.91%, and for payback period occurred in the 3rd year. Thus the fourth scenario is feasible to be implemented.</p>

Valuation of Equity using Discounted Cash flow Method

The growth of any economy depends on the strong financial system. Capital market plays a significant role in channelizing the savings into an investment activity by providing the platform to the investors as well as the firms to raise money. There are various instruments available for investment activities globally. Every investor has an objective to diversify portfolio globally to minimize risk among foreign markets and companies. Investor has to acquire the necessary skills to analyze the stocks to make better investment decisions in order to create wealth maximization. Valuation of equity is pre requisite for intelligent decision making in choosing the right scrip for investment in deciding the true value or intrinsic value of a share. There are few methodologies to evaluate the valuation of stocks such as discounted cash flow method, dividend discounted model. In this backdrop, this paper made an attempt to evaluate the Skyworks Solutions, Inc. stock with free cash flow to equity (FCFE) method of valuation during the 2016 to 2019 and to determine the intrinsic value of the stock and results found to be undervalued.

Stochastic Method of Discounted Cash Flows

The method of discounted cash flows (DCF) is one of the main and popular methods of economic assessment of business, which is used all over the world. However, the actual behavior of business projects evaluated by this method often differs from that predicted, and the difference can be tens of times.It should be noted that at present, the discounted cash flow method is a subject of extensive literature, but there are no analytical arguments for large discrepancies between the theory and practice of the method. The aim of the study is to provide a theoretical explanation of the forecasting errors inherent in the discounted cash flow method. The research method is related to the analysis of the traditional method of discounted cash flows, which shows that the key indicator that affects the final result is the net income for a certain period of time. Analyzing the economic content of the flows that appear in the formation of net income, we can conclude that for a trade-type enterprise, the cash flow of receipts associated with current operations is significantly random and, therefore, requires the use of stochastic description methods.The paper offers a mathematical model of the mentioned cash flow. It is assumed that the event associated with a purchase (cash receipt) is modeled on the time axis by a point with a random time of occurrence. Then, obviously, the number of points n that appear on a fixed time interval will be a random number. A justification is given for the fact that the point process is a Poisson random point process or simply a Poisson point process, in which the times of occurrence of points W1 ,W2 , ..., Wi and their number N(t) at time t are random variables. We introduce the function λ(t), which characterizes the average number of cash receipts (purchases) per unit of time. From an economic point of view, it is driven by consumer preferences of buyers, and from a mathematic point of view it is a function of the intensity of appearance of points of the Poisson process. The monetary values of purchases made by customers are described by random positive ui values which arise at the Wi moments of the occurrence of shopping events, simulate a random process of cash receipts at the enterprise.Introduction to the consideration of the random Poisson flow of business receipts and their values, which are also random positive values with an arbitrary probability distribution, is the key assumption of the work. The proposed approach allowed us to develop a stochastic model of the company’s revenues, generalize the method of discounted cash flows, obtain a number of simple ratios, and on this basis explain the growth of the method forecast error with an increase in the duration of the forecast horizon.New results of the study are the use of stochastic methods to describe business revenues and expressions obtained on this basis for the variance and standard deviation of the company’s net cash flow, depending on the number of forecasting periods. It is shown that the growth of the standard deviation of the net cash flow, i.e. the forecasting errors, is a fundamental feature of the method in this interpretation. For the initial estimates, a simple expression is obtained and corresponding graphs are given.In conclusion, it is noted that the presented graphs of the behavior of the standard deviation of the method estimates show that the estimate from below of the mentioned deviation slowly grows with an increase in the number of prediction periods and depends only on the number of periods. It is noted that this growth is calculated in relation to the first forecast period, which itself may contain errors, and it is determined only by consumer preferences. Of course, you can choose the forecast period not a month, but, for example, a year, but then the error of the first period will be significantly increased. Thus, this review makes it possible to explain some aspects of the growth of the error of the discounted cash flow method with the forecast time.