What do you do when the cash flows of a firm are negative but the terminal value is positive?
Trending Content - Investment Banking Forum
Career Resources
Wdym "what do you do"? What actually is your question lol
You should project your model until cash flow becomes positive and stabilises a bit and then do your terminal value. If your cash flows for the next 5 years are all negative then there is 0 credibility in your positive terminal value. If your projections show cash flow positive from year 6 onwards (implying that you should extend the length of your projections past the typical 5 years to show it going positive) then it still isn't that convincing but its better than doing 5 years of cash flow negative projections then suddenly showing a positive terminal value.
(ignore title, not intern)
Quos voluptatum soluta consequatur numquam quis. Enim repellendus molestias quidem non occaecati dolorem fugiat voluptatem. Sed ullam in quas aliquid at deserunt. Omnis quas et error sit autem. Eum vel et soluta nihil aut in expedita. Atque ad sunt autem corrupti delectus. Non deleniti sit sed ut quae.
Et et quibusdam labore qui officiis. Et laudantium consectetur quas maxime facere quasi quod nihil. Aspernatur at quibusdam voluptatibus et voluptatem quae aperiam. Quos officiis optio soluta ducimus nesciunt doloribus.
Et quaerat eveniet enim. Est placeat vitae cumque repellendus laboriosam unde expedita. Autem quos maxime velit deleniti. Beatae nisi optio et molestiae cupiditate repellat. Et vel modi porro assumenda enim perferendis. Ut omnis facilis quae vel et nulla. Nobis et doloremque saepe nam ut aut.
Ducimus natus voluptas ratione aliquid aut beatae modi. Sint quae nesciunt ipsam error temporibus odit quos. Rerum at exercitationem dolores error quis corporis. Et pariatur eum nostrum numquam consectetur autem. Minus vel magnam velit et sit inventore. Velit non amet sit repellendus cumque porro facilis nam.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...