Intrinsic value can be defined simply: It is the discounted value of the cash that can be taken out of a business during its remaining life. The calculation of intrinsic value, though, is not so simple. As our definition suggests, intrinsic value is an estimate rather than a precise figure, and it is additionally an estimate that must be changed if interest rates move or forecasts of future cash flows are revised.
The fact is that one of the earliest lessons I learned in business was that balance sheets and income statements are fiction, cash flow is reality.
Focusing on cash flow is the best way to determine whether the proposed project is feasible.
The ability to accurately predict cash flow is the best, most universal, and most consistent standard for financial management across all nonprofit institutions, regardless of size and mission.
The central question for positive financial economics is valuation – what is the value today of a set of future prospective cash flows? The central question for normative financial economics is the appropriate use of financial instruments in a world in which values are set wholly or partially in accord with the principles of positive financial economics.
Market valuations can differ substantially and persistently from the rational expectation of the present value of cash flows without leaving statistically discernible traces in the pattern of ex-post returns.
The three most dreaded words in the English language are 'negative cash flow'.
Money not spent on a luxury one considered even briefly is the equivalent of windfall income and should be spent accordingly.
Happiness is a Positive Cash Flow.