dc.contributor.author | Opondo, Erick M | |
dc.date.accessioned | 2013-05-15T09:37:50Z | |
dc.date.available | 2013-05-15T09:37:50Z | |
dc.date.issued | 2004 | |
dc.identifier.citation | Masters of business administration | en |
dc.identifier.uri | http://erepository.uonbi.ac.ke:8080/xmlui/handle/123456789/23089 | |
dc.description.abstract | Corporate valuation is a very central theme to the subject of Finance. Valuation models are of
various types based on either the income statement or the balance sheet approaches.
Valuation is important in both acquisition and or disposal of assets as going concerns or stand
alone investment(s).
While there is considerable agreement that the firm's value will be determined by the net
present value of the cash distribution it is expected to generate, opinion is however divided as
whether to use earnings as supported by practitioners (analysts, investors, managers) or focus
on free cash flow supported by modern Finance text books.
The focus of this paper was to compare the earnings based measures of corporate
performance against that obtained using free cash flow. Using (Beaver, 1966) free cash flow
definition, cash flow from operations (CFFO) has been computed and compared with earnings
measures of corporate performance.
The findings of this research which are expounded under section 4.2 of this paper indicate that
there is no significant difference between free cash flow measure of corporate performance
and that of earnings especially when the amount of maintenance capital spending cannot be
properly segregated. Further this research found that neither average profit after tax nor cash
flow from operations (CFFO) approximates to the market return model for stocks quoted at the
Nairobi Stock Exchange (NSE) at the time of this study. | en |
dc.description.sponsorship | University of Nairobi | en |
dc.language.iso | en | en |
dc.title | Using earnings and free cash flow to evaluate corporate performance | en |
dc.type | Thesis | en |
local.publisher | School of business,University of Nairobi | en |