Method of modeling companies activities with discounted cash flow

Abstract

   The article carries out a critical analysis of cash flow discounting methods and develops an algorithm for the informational support of the modelling process, which enhances the quality of forecasting models.
   The material for writing the article consisted of scientific papers as well as existing econometric models that allow predicting cash flows, taking into account the time value of money.
   The methodological basis of the study was the structural and logical approach, which allowed us to consistently and clearly separate the currently existing discounting models, highlighting their substantive foundations, characteristic features and functional capabilities.
   The methods used in writing the article included structuring the elements of financial models, distinguishing their functionality, critically reflecting on them, as well as algorithmising the process of cash flow analysis to enhance the quality of information modelling.
   Results. The author developed an algorithm for analyzing cash flows in order to improve the quality of information support for the use of discounted cash flow models. The results obtained can be used in the process of further formulating the theory of discounting and managing enterprise cash flows.
   Conclusions. The proposed approach to modeling cash flows enables a financial analyst to use discounted cash flow models with a higher degree of information support for the discounting process. Also, financial modeling of the cash flow management process is a tool that allows for the most objective forecast of the state of the enterprise in the future.
   Despite some limitations, the method remains an effective tool for assessing the cash flows in the context of enhancing the information support for the modelling process.