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Strategies & Market Trends : Free Cash Flow as Value Criterion
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To: HeyRainier who wrote (247)11/26/2000 3:08:31 PM
From: tyc:>  Read Replies (1) of 253
 
(from a neophyte trying to understand the market)

It seems to me that free cash flow as a Value Criterion implies the following statement;

"The value of any enterprise is based on faith that from this day forward future revenues (plus cash on hand) will exceed future expenditures. The value of the enterprise is simply the PV of that excess."

The amount expended in the past on capital plant (etc) is of no consequence, (except that its salvage value increases revenue after production has ceased).

Is this valid ?
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