Wyniki wyszukiwania - BazTech

1

The relevance of using cash flows and economic profit-based methods in capital budgeting: a focus on techniques – FCFF, FCFE and EVA

Gnap Michał, Pitera Rafał

Zeszyty Naukowe. Organizacja i Zarządzanie / Politechnika Śląska

|

2023

|

z. 172

219--238

EN

Purpose: The purpose of this paper is to examine consequences of choice: cash flow or economic value-added method on the net present value of investment project, further on company value. Design/methodology/approach: The article introduces three main methods to measure the net present value of investment project: free cash flow to firm, free cash flow to equity, and economical value added. Paper examines the challenge of using these three-methods in determining what constitutes cash flow and what is the source of the investment value. Findings: The cost of capital should be calculated in different ways to ensure the validity of the calculation. Estimation should be explored by other influencing factors, such as expected rate of return, market value of cost, rather than accounting/historical value. Implementing these factors is necessary to evaluate business value. According to the presented approach the use of the FCFF technique creates fewer risks of acting against the interests of the owners than the use of the FCFE or EVA techniques. Practical implications: As one of the main implications in business, valuation is cost of capital. According to the financing priority theory, when a firm needs financing, the first consideration is internal financing, while equity financing is secondary. Both types of financing sources determine the financing structure and ultimately affect the value of the company. Originality/value: The paper provided and insight in the different investment project valuation methods that are used in the nowadays practice. This was done in an attempt to answer the question: What method should not be used in the assessment of investment projects? The paper provides evidence that most appropriate method in estimating NPV value of investment project is FCFF.

2

Impact of cash flow variation on project performance: contractors’ perspective

Tarawneh Sultan, Almahmoud Anoud Fawwaz, Hajjeh Hassan

Engineering Management in Production and Services

|

2023

|

Vol. 15, no. 1

73--85

EN

This study aims to determine the impact of cash flow variation in Jordanian construction projects from contractors’ perspective and its relationship with project performance. An online questionnaire was developed and distributed to a selective sample. The respondents were project managers from contracting companies working in Jordan, around 340 construction companies. The sample frame was a form of non-probability sampling of 181 project managers. The collected data were analysed using the Statistical Package of the Social Sciences (SPSS) version 25. The study results showed a positive statistically significant effect at the significance level (α ≤0.05) of cash flow variation on project performance in Jordanian construction projects. In addition, respondents indicated a high level of agreement on the impact of cash flow variation on projects’ performance, with a mean of 4.01 and a standard deviation of .546. However, on the project performance dimensions’ level, Quality came first, with a mean of 4.11 and at a high level, followed by Safety, with a mean of 4.01 and at a high level, while Final Cost ranked third with a mean of 3.96 and at a high level. Finally, Project Final Duration ranked fourth with a mean of 3.95. The researchers recommended the necessity of more efforts for a better understanding of the importance of cash flow by contractors to schedule project activities correctly and efficiently to maintain a steady state of the project cash flow.

3

S-modeS-model for project cost management in value engineering for construction companies

Yang Yang, Xiao Wanxin, Lyshenko Margarita, Zhang Yang

Bulletin of the Polish Academy of Sciences. Technical Sciences

|

2023

|

Vol. 71, nr 6

art. no. e146617

EN

Today’s fast-changing environment for construction companies requires rapid responses and adaptation of their projects. Despite the multitude of tools applied for project cost management in engineering and construction companies, there is a need to form comprehensive solutions. The purpose of the study is to form a methodological approach to project cost management in the field of engineering construction based on alternative models to diagnose the development, assessment and selection of functional areas and content of cost management in the construction project, which allows one to increase adaptability and flexibility in the process of its implementation. The basis of research methodology is modeling, which allows one to adjust the economic and financial flows based on three S-curves, one for each component of the total cost of the work: direct costs, indirect costs and reserves. These curves include the direct cost curve for the main purchasing packages as well. This brings financial flows closer to reality because it is possible to adjust the S-curves according to the behavior of each subsystem. The contribution of the study is the proposed approach of integrating concepts related to the coordination and development of project design and production management (lean construction), forming a “3D model of management”, in a broad and comprehensive management system. It assumes a comprehensive and complete way to manage civil engineering projects. The proposed methodological approach can make a significant contribution to the preparation of forecasts and estimates by planners and controllers in the context of construction projects.

4

Operating cash flow in commercial firms listed on the Ho Chi Minh Stock Exchange

Tai Do Duc, Dung Tran Manh, Hong Nguyen Thi Xuan

Annals of Computer Science and Information Systems

|

2021

|

Vol. 28

277--282

EN

The study is conducted to scrutinize four operating cash flow indices of commercial firms listed on the Ho Chi Minh Stock Exchange (HSX). The research employs a set of aggregated data from 14 commercial firms. At the same time, the study also receives comments from experts experienced in the same field. We used both qualitative and quantitative methods. We have performed some descriptive analysis, compared to evaluate and measure four operating cash flow indices of commercial firms, including: (i) Operating cash flow/net sales; (ii) Operating cash flow/total assets, (iii) Operating cash flow/owner's equity, and (iv) Operating cash flow/net operating profit. The results illustrate that there is a big difference in operating cash flow indices of commercial firms listed in the context of Vietnam. Foreign ownership accounts for a relatively low proportion of these firms. Based on the results, some suggestions are proposed for commercial firms in order to improve the four operating cash flow indices.

5

Implementation of deviation analysis method in the utilisation phase of the investment project : a case study

Janekova J., Fabianova J., Onofrejova D., Puskas E., Busa M.

Polish Journal of Management Studies

|

2017

|

Vol. 15, No. 1

99--109

EN

Management of investment projects incorporates phases of pre-investment, investment and utilisation. A well-conducted pre-investment and investment phases reduce the risk of problems that might occur in the utilisation phase, but cannot be eliminated entirely, as the development of internal and external assumptions may not be consistent with the plan. Therefore, even in the utilisation phase, it is necessary to analyse the economic results actually achieved with planned one. The article presents application of the deviation analysis method in the utilisation phase of the assessed investment project. Net Present Value (NPV) deviation analysis is focused on the EBITDA indicator and supplemented by specifying the causes of deviations. The results of the study show that deviations of NPV are caused mainly by lowering the production volume of both products and by a decrease in variable costs per unit. The presented measures lead to the reduction in the probability of the deviations occurrence.

PL

Zarządzanie projektami inwestycyjnymi obejmuje etapy: przedinwestycyjny, inwestycjny i wykorzystania. Dobrze prowadzone fazy przedinwestycyjne i inwestycyjne zmniejszają ryzyko pojawienia się problemów, które mogą wystąpić w fazie wykorzystania. Nie można ich jednak całkowicie wyeliminować, ponieważ rozwój wewnętrznych i zewnętrznych założeń może nie być zgodny z planem. Dlatego też, nawet w fazie wykorzystania, konieczne jest dokonanie porównania wyników ekonomicznych faktycznie osiągniętych z planowanymi. W artykule przedstawiono zastosowanie metody analizy odchylenia w fazie wykorzystania projektu inwestycyjnego. Analiza odchylenia wartości bieżącej netto (NPV) koncentruje się na wskaźniku EBITDA i uzupełniona jest poprzez określenie przyczyn odchyleń. Wyniki badania wskazują, że odchylenia wartości bieżącej netto spowodowane są głównie przez obniżenie wielkości produkcji obu produktów i zmniejszenie kosztów zmiennych na jednostkę. Prezentowane działania prowadzą do zmniejszenia prawdopodobieństwa występowania odchyleń.