1, investment in fixed assets. Including the purchase and construction costs of fixed assets, transportation costs and installation costs.
2. Current assets investment. Including investment in materials, products, finished products and cash.
3. Other investment expenses. Refers to the employee training fees, negotiation fees and registration fees related to long-term investment.
4, the original fixed assets income. This mainly refers to the cash income from selling the original fixed assets when the fixed assets are updated.
First, the initial cash flow formula
Initial cash flow = funds invested in current assets+funds invested in fixed assets.
It is worth noting that if the capital invested by an enterprise in fixed assets is invested by the original old equipment of the enterprise, the realized value of the equipment should be used as the basis for cash outflow when calculating cash flow. That is to say, when evaluating an independent scheme, it is assumed that the income that may be obtained from the sale of the equipment will flow out as cash, and the income tax that may be paid or exempted will be considered. Expressed as:
Initial cash flow = capital invested in current assets+realized value of equipment-(realized value of equipment-depreciated value) * income tax rate.
Two. Operating cash flow
Operating cash flow refers to the amount of cash inflow and outflow generated by production and operation during the life cycle after investment projects are put into use. This cash flow is generally calculated on an annual basis. Cash inflow here generally refers to operating cash income.
Cash outflow refers to operating cash expenditure and taxes paid. If the annual sales income of an investment project is equal to the operating cash income. If the cash cost (excluding non-cash costs such as depreciation) is equal to the operating cash expenditure, the annual net operating cash flow (NCF) can be calculated by the following formula:
Annual net cash flow (NCF)= operating income, cash cost, income tax or annual net cash flow (NCF)= net profit, depreciation or annual net cash flow (NCF)= operating income× (1-income tax rate)-cash cost× (1-income tax rate)+depreciation× income tax rate.