Kroll Valuation Analyst Interview Questions and Answers

The cash flow process involves tracking the movement of money in and out of a business over a specific period of time.

• Cash flow is calculated by subtracting cash outflows (such as expenses, investments, and dividends) from cash inflows (such as revenue, loans, and investments)

• It helps in determining the financial health of a business and its ability to meet its financial obligations

• Cash flow analysis is crucial for ass...read more

A DCF (Discounted Cash Flow) is a valuation method used to estimate the value of an investment based on its expected future cash flows.

• Estimate the future cash flows of the investment

• Apply a discount rate to these cash flows to account for the time value of money

• Calculate the present value of these cash flows to determine the investment's intrinsic value

Steps for calculating FCFF, FCFFE, Enterprise Value

• Calculate Free Cash Flow to Firm (FCFF) by subtracting capital expenditures and changes in working capital from operating cash flow

• Calculate Free Cash Flow to Equity (FCFFE) by subtracting net debt repayments from FCFF

• Calculate Enterprise Value by adding market value of equity, market value of debt, minority interest, and preferred stock, then subtracting cash and cash...read more