Discounted Cash Flow by Matthew Roddan

When a company’s financials are scrutinized, metrics used to evaluate the same are important. According to Wall Street, a company’s cash flow is the best indicator for a company’s performance. As such, DCF or discounted cash flow analysis is used to determine a company’s worth by estimating future cash flows.

Projected cash flows (operating profit + depreciation + amortization of goodwill - capital expenses - cash taxes - alteration in working capital) are discounted to current value using company’s weighted average costs. In short, DCF is an effective and unparalleled tool for determining share value, which is important for investors.

Also, a few financial scandals only hiked the importance of DCF. With more concerns about reliability of earnings and calculation of P/E or cash flow determination, coming up with a DCF model calls for more efforts than merely dividing share price by income or sales. However, taking this effort ensures investors get a good idea of the key factors like share value, projection of future income or profits, growth ratio, etc. Besides, DCF can’t be manipulated through aggressive accounting practices easily.

While DCF is a very useful tool, it isn’t without shortcomings. It is a mechanical valuation tool that works akin to garbage in, garbage out saying. So, any minor change or change in assumptions could lead to major differences. But, investors should always crosscheck evaluations and allow considerable margin for such changes or errors, when taking decisions. Major investment decisions should not be taken purely relying on DCF calculations alone. What if a client backs off from a contract, or what if interest rates hike unexpectedly or even a competitor cropping up with crushing prices and the firm losing most business? Remember, when expectations change, calculations or derivations based on the assumptions will change along with it! Do you know even reputed investor Warren Buffet and other financial experts and portfolio managers rely on DCF?

Discounting cash flow is tricky and it is important to remember that assuming or predicting future estimates could be meaningful or meaningless depending on the estimates taken and how reasonable they are. Besides, numbers aren’t static and keep changing with changing trends. As for investors, evaluating stock pricing is very important and DCF is a handy aid for calculating the same, says Matthew Roddan of Project Ninety Nine. Do you know stock market speculations are based on DCF? Whether it is acquiring a business, or a property, or investing on stock, DCF helps with speculating approximately.

Matthew Roddan

Is Money Important? By Matthew Roddan

We’ve all heard the saying “Money can’t buy happiness” several times. Funny how most of our problems are related to money or created by money! Can we really ignore money? Money is a means of exchange and a very essential commodity. Without money there’s nothing one can do today – home, education, food, medical assistance and what not, everything boils down to money.

Right from the time a life is brought into the earth, everything revolves around money. While money is not everything, is does play a key role in our lives and one can never do without it. That aside, what about businesses? Can businesses be commenced or run without money? There’s always a pursuit for money and there’s no denying the fact that enough money can bring one a secured feeling. That’s one reason why many prefer starting their own business, says Matthew Roddan of Project Ninety Nine.

With tumbling economy, many lost their jobs and were left in lurch and succumbed to not being able to manage the change or uncertainty. Even established individuals who had a career for years couldn’t take the hit and look for new opportunities, if at all there were any! By having a business, one can control their destiny and not leave it at the mercy of others – this is one reason that pushes many to start their own business.

It is one reason why many who don’t have the resources for starting a business, look for potential investors or crowd funding to start their dream and take reigns of their future. When potential entrepreneurs have profitable proposals, investors or sponsors are interested in taking the plunge, provided they’re briefed on the possibilities adequately. Matthew Roddanof Project Ninety Nine says that’s one reason why project proposals should be prepared along with financials and statistics to show potential investors. Being prepared is the key to getting funding and Project Ninety Nine brings potential entrepreneurs and investors to discuss on options and take up profitable and potential ventures.

Unlike other sites, this is a real platform where investors discuss and share knowledge and projects that catch their attention are given a thought, analyzed and the site intervenes to come up with a mutually beneficial proposal. In other words, the site stays though the ride and ensures both parties’ interests are taken care of. Handling finances the right way ensures one gets to live comfortably, secure one’s future and what not. Money is a means to an end – one’s security, which influences one’s happiness, freedom and quality of life.

Matthew Roddan

Discounted Cash Flow ~ An Overview

DCF short for discounted cash flow analysis is a way to evaluate a company, project or assets. Cash flows for the future are assumed and discounted considering cost of capital to get the current values. Sum of future cash flows outgoing or incoming is net present value (NPV) that’s taken as price or value of cash flows. Discounted cash flow analysis is used to determine the worth of an investment in simplified terms. It is used in real estate development, investment finance, patent evaluation and corporate financial management.

As Matthew Roddan from Project Ninety Nine says, understanding the probability of risk and profits is very important in an investment decision. Investment decisions are made for profits and understanding what one can expect is very important to determine the suitability of an investment. Exponential discounting is the most common method deployed for discounting, to evaluate future cash flows answering the question – what would be the returns for an investment at a specific rate of return, as against cash flow expected in the future? Hyperbolic discounting is another method, though not deployed widely. Discount rate is the right weighted average cost of capital (WACC) and it reflects cash flow risks.

Discounted cash flow analysis is important for any investor to determine if or not an investment decision is suitable. Let’s look at it this way – consider the investment as a business or a company. DCF is a way to determine a company worth currently, based on calculations for the future. Though this is a useful method, it does have hiccups. Being a mechanical evaluation tool, it is bond by a principle and even simple changes in one value could result in major changes in value. So, instead of determining values for infinity a cap is used – say 10 years. This way, estimation becomes measurable.

Besides, Discounted Cash Flow is a method that uses intrinsic valuation for companies that have predictable flow of cash. It is used for companies that have been around for a while, though it is also used for IT companies that are expected to grow swiftly. This means, when a start-up or developing firm is evaluated, the results could go right or horribly wrong! As an investor, you must be able to weigh your options and prepare for both, says Matthew Roddan of Project Ninety Nine. This way or that, evaluating an investment is important for any investor and determining the right investments is done based on calculations that are probabilities and possibilities, not a definitive. The calculated risk should be something you would be able to manage, irrespective of whether it turns our favorable or not! 

Dubai International Financial Centre By Matthew Roddan

The Dubai International Financial Centre also called DIFC is located in Emirate of Dubai and is a federal financial free zone in United Arab Emirates. Established in 2004 through a decree, DIFC is a sprawling 110 acres. Legal systems and courts are different from UAE, with a jurisdiction over commercial, corporate, employment, trusts, civil and securities law affairs. The main aim of DIFC is to offer a platform for financial and business institutions to enter in or out of emerging marks in the region and to create an ambiance for progress, growth and economic development in UAE by offering adequate infrastructure and legal backing on par with international standards.

Under the constitution of UAE, DIFC is independent judicially with commercial and civil laws different from that of UAE. DIFC laws are in English to avoid ambiguity and DIFC has courts and judges from jurisdictions with common law like Singapore, England and Hong Kong. Though DIFC has independent laws, the immigration rules and criminal law is the same as UAE. DIFC-LCIA Arbitration Centre is modeled after London Court of International Arbitration. DIFC Authority is the main governing body for DIFC and DFSA (Dubai Financial Services Authority) regulate financial services in DIFC, though it is different from UAE federal Securities and Commodities Authority that governs outside of DIFC.

Financial institutions can submit applications for a license and they’re benefitted from the 0% tax for income and profits, no limitations on Forex or profit/capital repatriation, 100% foreign ownership, business continuity and operational support amenities. Dubai International Financial Exchange is a privately owned financial exchange for DIFC and was listed as DIFX and rebranded as NASDAQ Dubai in 2008. DFSA regulates NASDAQ Dubai.

Dubai International Financial Centre Complex houses a hotel, Ritz Carlton that was opened in 2011. Dubai International Financial Centre also houses art galleries, restaurants and an array of outlets for shopping extravaganza. The Dubai shopping season has garnered acclaim worldwide and the number of tourists visiting during this season shoots through the sky. Many entrepreneurs would like to have a business established in DIFC and it isn’t surprising considering the perks and profits businesses get here. Matthew Roddan of Project Ninety Nine would recommend suitable and innovative project launch here, when an able leader is helming it.

The location of a business is very important and DIFC is one location businesses should consider. Not just for expansions, even new launches that are good would sure thrive and flourish here. There’s a reason why it is called Financial Centre and you must try it, to believe it.

By Matthew Roddan

What’s a Medium Term Note?

Medium-term note or MTN is when a debt note maturity period is 5 – 10 years, though technically the repayment duration or maturity period could be less than a year to a 100 years! These debt notes can be issued on floating or fixed coupon basis. Floating rate MTNs are either simple where the coupon is aligned

Euribor +/- basis points or it could be notes with complex structure and linked to indices, swap treasuries, etc.  If they’re issued to investors who aren’t residents of the US, they’re termed "Euro Medium Term Notes". Issuing MTNs to US-based investors calls for a US MTN program.

MTNs can come with fixed maturity date or come with put options, embedded call wherein MTNs could be redeemed per pre-accepted terms or speculations. MTN is usually issued for unsecured investment debts, with fixed rates, though it offers flexibility to both the issuer and investor when it comes to documentation and structure. While many use bank instruments for PPP and have an idea of how MTNs work, many don’t know how it really works! It is funny how they’re rising in popularity and many deploy it for different purposes, without knowing how these instruments work or what it really is! Matthew Roddan of Project Ninety Nine explains MTNs are a great way to get into PPP, especially since not many have the funds required to invest in PPP from their resources. Since PPP is gaining exposure and many would like to know if or not PPPs are what stuffs that make a mythical legend, let’s understand MTNs better.

According to Matthew Roddan, many aspire to invest in PPP but end up being unable to do so by trusting wrong people (brokers) or because they don’t have enough resources. The former is truer and why many think PPPs don’t exist. So, let’s understand MTNs better and how they can be used for PPP. MTNs are instruments of debt issued by banks and are sold to investors with a good face value, annual interest rate and maturity date. So, if you hold a note from Bank of America that’s worth 100 million, with interest rate of 7% each year, you will get 7 million till the instrument matures, after which you can cash it for its worth!

While MTNs are very similar to debt notes, it is more popular because of its price, flexibility, resale potential and option to be bought at a discount instead of its face value. According to Matthew Roddan from Project Ninety Nine, MTNs are available for more than fifty years and can effectively compete with any bank instrument. Since they were available for discounted rate, it became popular after “trading bank instruments” gained notoriety in the secondary market. PPP reign began soon after and Internet has made it even more popular and widely available. If you have an interest in PPP, MTNs Project Ninety Nine are your go-to option.

By Matthew Roddan

Top 5 Software Testing Automation Tools For 2011

There is no denying the way that PCs and programming projects are quickly supplanting manual methodologies at a quickened rate over the long haul. Programming apparatuses have made ordinary life and business forms more productive and financially savvy, and programming testing checks that recently created programming is in living up to expectations request before it is brought into the business sector.

With more programming projects hitting the business sector, the computerization of programming testing methodologies has ended up amazingly vital. Programming advancement organizations use programming testing computerization instruments to scaffold the holes on recently created frameworks to guarantee the end client gets a quality item that is free from bugs. All things considered, on the off chance that you are an analyzer or designer, it is critical to discover the best programming testing computerization apparatuses in the business sector. The following are the main 5 product testing computerization instruments accessible today.

QA Wizard Pro 2011

QA Wizard Pro is a robotized programming testing device grew via Seapine Software. Seapine Software is a main supplier of item advancement devices for IT associations around the world. While the organization offers a mixture of distinctive IT devices intended to outfit clients with astute advancements, the new QA Wizard Pro 2011 is appraised the top of the line item offered via Seapine. Intended to give mechanized useful testing and burden testing, QA Wizard Pro will lessen your organization's product speculation and preparing time.

Prophet Enterprise Manager

Prophet is extraordinary in the IT business; the organization has been giving coordinated business programming applications to decades. Prophet's Enterprise Manager is intended for big business applications, and it offers organizations great control of their IT assets without an amazing sticker. The Enterprise Manager conveys thorough testing instruments to guarantee disentangled test administration, along these lines advancing greatest productivity.

Testing Anywhere

Testing Anywhere is a simple to utilize programming testing application that can give clients the instruments they have to take part in computerized testing anyplace. With 5 separate approaches to mechanize, coupled with some exceptional reporting gimmicks, clients can diminish their aggregate expense of proprietorship and decrease the measure of time it takes to test programming projects by as much as 60%. This application offers solid SMART computerization and progressive innovations for scripts and recorded tests.

AppLabs

AppLabs cases to be the biggest programming testing and quality administration organization on the planet. Their propelled robotization testing devices permit clients to viably accomplish the ideal profit for their product speculation. The principle reason for AppLabs mechanization apparatuses is to influence innovations and improve adaptability while as yet diminishing out-of-pocket expenses.

SmarteSoft

SmarteSoft makes test robotization simple and moderate. software testing tester This arrangement will oversee and screen your venture's prerequisites and will report deserts and experiments in one helpful environment. On the off chance that you need relapse testing and access to a brought together control focus with manual and programmed testing apparatuses, consider utilizing SmarteQM Test Management.

Conclusion

Programming testing mechanization devices are a reasonable path for associations to test and screen the execution of recently created programming projects. Peruse through the value plans and gimmicks of every computerized testing arrangement supplier, and pick the particular case that will suit your authoritative needs the best.

Typical Structure Of Software Testing Process

All things considered programming advancement ventures move ahead according to the accompanying group structure

1) Team of Feature Owners: It is a top-level group in the chain of command, which specifically interfaces with the imminent clients. It is mindful to minutely comprehend the client prerequisites and gatherings them into a few peculiarities. Different individuals in such a group may turn into the holders of some of such peculiarities. The colleagues take due activity and effectively interface with different groups get to be instrumental in giving essential headings in adding to the peculiarities claimed by them.

2) User Interface Team: The User Interface called UI in short is greatly critical for the item. Regardless of the fact that a product item has arrangement of brilliant peculiarities, however its User Interface is not successful & advantageous, the item is bound to come up short.

Consequently autonomous User Interface group is made. The individuals from a User Interface group are experts in planning the User Interface for the product items and comprehend the distinction among a decent User Interface and a poor one. The sole destination of such User Interface group is to do far reaching research in the User Interface.

The UI group plans UI for the item or its peculiarities. In the following step the UI group communicates with Feature Owners group to give a viable shape to the UI together. Such meeting may come about into may be "Page plans" or a few "Mockups" containing all components of the UI as needed in the page. The mockups are useful in displaying the fancied appearance or looks of the page. Genuine route between different pages is additionally checked amid such cross-useful gatherings.

3) Development Team: Is depended the errand of improvement of the Product.

4) Testing Team: Is depended the errand of testing the item.

Stream OF THE PROCESS:

1) Project Kick Start: The individuals from gimmick managers group kick begin the procedure with the advancement of a configuration archive at High level pertinent for each peculiarity & the same is discharged to all concerned.

2) Release of High Level Design Document: Apart from the High level configuration record arranged by peculiarities managers, the plans of the pages or the User Interface Mockups are discharged to all concerned for reference by the UI groups.

3) Software Development: Coding of the craved peculiarities is begun by the advancement group according to the discharged reports.

4) Software Testing: The testing group kick begins the testing related exercises in the accompanying way:

($) Preparation of a Document with Test Outline: This report depicts points of interest of streams of the test or Multiple-Test Scenarios anticipated at abnormal state. Test diagram should have short data regarding what needs to be checked and soon thereafter amid the stream.

Notwithstanding the subtle elements of streams, this test blueprint record contains nitty gritty network portraying all the necessities from the High Level Design Document (HLD) down to the test streams. In HLD an extraordinary ID can notably recognize every prerequisite. The reason for this grid is to verify that all prerequisites have been painstakingly checked for any insufficiency.

($) Preparation of Test Cases: Every test situation is further changed over to an individual experiment, which contains all the point by point data. It points out careful steps for route, sought information and itemized data concerning what needs to be checked. Nitty gritty clarification in Test Cases is useful particularly when the persons composing the experiment are other than the persons going to execute them.

($) Test Automation: Although not necessary, test robotization is noncompulsory step. This includes robotization of the composed experiments with the assistance of some mechanization apparatus, ideally equipped to the prerequisites of the organization.

($) Concurrent Activities: Development & testing work is conveyed simultaneously. The improvement group gets occupied with the principle errand of coding of the wanted peculiarities. Improvement group now and then does a testing at their end also. Meanwhile the testing group readies the experiments for manual testing and robotization scripts for mechanizing the test execution with the assistance of some mechanization device.

($) Product Testing: The cycle of testing starts when the testing groups effectively begin the testing of the item and begin logging the bugs in the characterized bug storehouse framework. Simultaneously the engineers are occupied with fixes of the bugs.

As a best practice, two different occasions of the application are kept up. One example is reserved for the testing group and the second one is implied for the group of designers or bug altering group. However both the groups work on the same code level.

($) Logging of Bugs: Prior to logging a bug in bug storehouse framework, it is checked concerning whether we can duplicate it in the example implied for the designers or not. In the event that the bug is reproducible, it is allocated to the concerned engineer for essential settling. At the point when the bug is settled, then the code fix is connected on engineer's case, completely checked and after that it is connected to the testing group's example for relapse testing. Software testing

However in the event that the bug can not be repeated on designer's occurrence, it might be surmised that it can be an issue identified with some sort of use setup. In such case the designer associates with the testing group to learn on the off chance that it is a veritable bug obliging changes in the code or it is an application setting issue. Such application setting issues are very regular amid testing of programming suites of hard coordinated items.

($) Regression Testing: Code fixing is carried out & the analyzers rehash the testing from the earliest starting point. Keeping in mind the end goal to alter the bugs, regular fixing of the framework is maintained a strategic distance from. According to the best arrangement for fixing the bugs, including for numerous rounds of testing, fixing of all bugs gathered between two testing rounds is carried out once just, The bugs are altered and kept prepared for fixing together. This likewise does not have a hard & quick run the show. Exemptions are there for bugs, which are thought to be basic & which can extremely hamper the testing can be fixed quickly.

($) Sanity Testing: After the fixing is carried out, the application example is subjected to rational soundness testing by the improvement group. At that point it is discharged for the following testing round including execution of all the experiments once more. This incorporates execution of the experiments which happen to pass in the past round.

($) Stopping the Testing Operation: In a situation of different testing adjusts, a vital choice needs to be taken in the matter of whether to move ahead to the following round of testing or end there itself. The basic choice to an extensive degree relies on the quantity of bugs which had been logged amid the past round of testing. Two elements can help take such a choice are:

1) Further testing can be ceased when no crisp basic bugs are distinguished & when there is no further need felt for relapse testing.

2) Further testing can be ceased when less number of minor issues are cleared out. The expression "Less" is exceedingly subjective and depends generally upon the application under test.