Fifth day (part three)
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This document provides an overview of corporate finance concepts including sources of finance, financial statements, and methods for evaluating investment projects. It discusses net present value (NPV), internal rate of return (IRR), and payback period as ways to analyze potential projects. An example compares three projects, showing their costs, NPV, IRR, and payback period to demonstrate how to evaluate them. The document aims to introduce basic corporate finance and financial planning principles.
Fifth day (part three)
- 1. Corporate finance Gol team LOGO Presented by : Hatem Ali CPM
- 2. Contents Finance and Source of finance financial statement Net present value (NPV) Internal rate of return Pay back workshop Company Logo
- 3. Finance The science that describes the management, creation and study of money, banking, credit, investments, assets and liabilities. Finance consists of financial systems. which Some prefer to divide finance into three distinct categories: public finance, corporate finance and personal finance. Company Logo
- 5. Financial statement Income statement. that measures a company's financial performance over a specific accounting period Balance sheets. that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. Cash flow statement. which shows the amount of cash generated and used by a company in a given period. Cash inflows usually arise from one of three activities - financing, operations or investing Company Logo
- 6. How to start financial plan Financial plan Cost Expected return (initial investment) 5 years of expected return . Operation cost Rent Wage Any expenses
- 7. Financial plan Net present value (NPV): the sum of present value of all expected incremental cash flow. Internal rate of return (IRR): The discount rate that’s makes the following relationship hold: PV (inflow)= PV (outflow) Pay back period: the number of years it takes to recover the initial cost of investment.
- 8. Example Pro1 Y0 Y1 Y2 Y3 Y4 Y5 Investment -50 Cash in 10 15 20 25 30 Net cash flow -50 10 15 20 25 30 Pro2 Y0 Y1 Y2 Y3 Y4 Y5 Investment -200 Cash in 20 30 50 70 100 Net cash flow -200 20 30 50 70 100 Pro3 Y0 Y1 Y2 Y3 Y4 Y5 Investment -15 Cash in 3 10 15 20 25 Net cash flow -15 3 10 15 20 25
- 9. Example project 1 2 3 Cost 50,000 200,000 15,000 NPV 57,428 148,742 40,097 IRR 23% 9% 60% PBP 3.8 5 2.6
- 10. Questions
- 11. Contact Hatem Ali Mobile: 01225568356 e-mail: hatem_aly87@hotmail.com
- 12. THANK YOU!