Discounted Cash Flow Method Sample Clauses

Discounted Cash Flow Method. The DCF Method is generally appropriate in situations where the entity’s cash flows can be reasonably estimated and are expected to differ significantly from the current situation (due to, for example, expansion of capacity, significant change of management and/or financial structure, cessation or sale of a portion of a business, or where the subject of the valuation has a finite life). Under the DCF Method, projected future earnings or cash flows are discounted by the desired rate of return, which considers a number of internal and external factors relating to the business being valued, as well as the time-value of money. In effect, the rate of return has regard to the various risks attached to, and the opportunity costs of, acquiring the business. In addition, if appropriate, the residual, or “terminal”, value of the business/assets at the end of the projection period is included in the calculation, as there is an assumption that the assets purchased will ultimately be disposed of (converted to cash). To the extent that the sales proceeds of such assets form all or part of the return of the initial purchase price, such proceeds are considered in the same manner as other income/cash in-flows received during the period and would be discounted back to the valuation date accordingly.
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Discounted Cash Flow Method. Under the Discounted Cash Flow Method, the projected future cash flows of the Company were discounted to the present value by applying the appropriate discount rate. Projected future cash flow data was based on the business plan prepared by the Company and provided to KPMG by Parent. KPMG did not verify the Company's business plan. The growth rate of 0% to 1% into perpetuity was taken into account in determining future cash flows beyond the fiscal year 2003. Subsequently, projected cash flows were adjusted by depreciation expense, capital expenditures, amortization of goodwill, changes in working capital and interest expense. KPMG applied a discount rate of 12.6% based on KPMG's view of the Company's weighted average of cost of capital. KPMG also considered that the Company's net operating losses could be used to offset against future taxable income. Based on Discounted Cash Flow Analysis, the KPMG determined that the fair market value of the Shares was in the range of $4.10 to $4.60 per Share. Tender Offer Bid Premium Analysis KPMG also analyzed publicly announced data for recent tender offers for companies that subsequently went private in order to assist Parent in determining an appropriate premium for the Offer. KPMG determined that the average tender offer premium for recent U.S. transactions with a comparable transaction size was approximately 38.3% in excess of the trading price on the day before announcement, 36.9% in excess of the trading price 5 days prior to announcement and 44.7% in excess of the trading price 30 days prior to announcement. Based on this analysis, KPMG determined that an appropriate tender offer bid premium for the Shares would be 40%. PURPOSE AND STRUCTURE OF THE OFFER AND THE MERGER; REASONS OF PARENT FOR THE OFFER AND THE MERGER The purpose of the Offer and the Merger is for Parent to increase its ownership of the outstanding common stock of the Company from approximately 57.1% to 100%. Upon the consummation of the Merger, the Company will become a wholly-owned direct subsidiary of Parent, thereby simplifying Parent's holding company structure and furthering Parent's ability to combine the Company's operations with those of Parent. Parent believes that its ability to realize and take advantage of potential synergies between the operations of Parent and its subsidiaries and the Company have been hampered by the Company's current structure. Parent believes it would be better able to achieve the desired level of potential syner...
Sample 1
Discounted Cash Flow Method. A discounted cash flow (DCF) method is a valuation method used to determine the present value of any investment. DCF analysis uses future cash flow projections and discounts them to arrive at a present value estimate. 𝐶𝐹𝑖 where, 𝑃𝑉 = ∑ (1 + 𝑟)𝑡𝑖 𝑖=1 𝐶𝐹𝑖 is the cash flow paid at the end of interval 𝑖 or at time ��𝑖 . 𝑟 is the yield to maturity. 𝑡𝑖 is the time interval from valuation date to cashflow date. 𝑇 is the maturity date.
Sample 1

Related to Discounted Cash Flow Method

  • Net Cash Flow The term “Net Cash Flow” shall mean all cash and cash equivalents from all sources on hand as of the last day of the measurement period prior to any distributions to the Partners, and after the payment of all then due expenses of operating and managing the Restaurants, and after payment of all debts and liabilities and after any prepayments of any debts and liabilities that the General Partner, in its reasonable and good faith discretion, elects to cause to be made, and after the establishment of any reserves reasonably deemed necessary by the General Partner for (i) the repayment of any due debts or liabilities, including debts owed to the General Partner; (ii) the working capital requirements; (iii) capital improvements and replacement of furniture, fixtures or equipment; and (iv) any contingent or unforeseen liabilities. In determining Net Cash Flow of each Restaurant there shall be deducted the Supervision Fee and the Accounting Fee as provided in Section 4.7, the Advertising Payment and the Insurance Payment as provided in Section 4.8, and the OSRS Charges as provided in Section 4.2.

  • Cash Flow Leverage Ratio The Borrower will not permit the Cash Flow Leverage Ratio on the last day of any fiscal quarter to exceed 3.50 to 1.00.

  • Operating Cash Flow As used in this Agreement, “Operating Cash Flow” shall mean and be defined, for any fiscal period, as all cash receipts of the Partnership from whatever source (but excluding Capital Cash Flow and excluding the proceeds of any Capital Contributions to the Partnership) during such period in question in excess of all items of Partnership expense (other than non-cash expenses such as depreciation) and other cash needs of the Partnership, including, without limitation, amounts paid by the Partnership as principal on debts and advances, during such period, capital expenditures and any reserves (as determined by the Managing General Partner) established or increased during such period. Operating Cash Flow shall be distributed to or for the benefit of the Partners of record as of the applicable record date not less frequently than quarterly, and shall be allocated among the Partners as follows:

  • Cash Flow Coverage Ratio The ratio of (a) the Borrower's Cash Flow to (b) the sum of (i) the Borrower's consolidated Interest Expense plus (ii) the Borrower's scheduled payments of principal (including the principal component of Capital Leases) to be paid during the 12 months following any date of determination shall at all times exceed (1) 1.5 to 1.0. Compliance with the ratio will be tested as of the last day of each month, with Cash Flow and Interest Expense being calculated for the twelve months then ended.

  • Consolidated Total Net Leverage Ratio Permit the Consolidated Total Net Leverage Ratio on the last day of any fiscal quarter occurring during any period set forth below, to be greater than the ratio set forth below opposite such period: Period Maximum Consolidated Total Net Leverage Ratio Closing Date through and including September 30, 2014 7.25:1.00 December 31, 2014 through and including September 30, 2015 6.75:1.00 December 31, 2015 and thereafter 6.50:1.00

  • Maximum Consolidated Total Leverage Ratio The Borrower will cause the Consolidated Total Leverage Ratio to be less than (a) 4.00 to 1.00 at all times during the period from the Effective Date to and including December 30, 2009, (b) 3.75 to 1.00 at all times during the period from December 31, 2009 to and including December 30, 2010 and (c) less than 3.50 to 1.00 at all times thereafter.

  • Consolidated Total Leverage Ratio As of the last day of any fiscal quarter, permit the Consolidated Total Leverage Ratio to be greater than 3.00 to 1.00.

  • Annual Percentage Rate Each Receivable has an APR of not more than 25.00%.

  • Adjusted Leverage Ratio The Borrower shall not permit the Adjusted Leverage Ratio as at the end of any Fiscal Quarter to be greater than the following for the respective periods set forth below: Period Adjusted Leverage Ratio Closing Date to and including March 27, 2004 3.75:1.00 March 28, 2004 to and including June 26, 2004 4.75:1.00 June 27, 2004 to and including July 2, 2005 5.60:1:00 July 3, 2005 and any time thereafter 5.25:1.00

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