Project Description
In this project, Lloyd Tanlu (Accounting and Finance) and I will work over Spring/Summer 2026 on our project which examines the impact of variations in the calculation of a company’s free cashflow (FCF). The use of discounted cash flow models to estimate the intrinsic value of a firm’s equity is the most widely accepted method of valuation in practice as well as in the academic literature. However, both practitioners and academics calculate FCF in notably different ways. These variations in FCF calculation methods can lead to materially different valuations and consequently investment decisions. Last summer, Professor Tanlu and I collaborated with SRS students on summarizing and discussing the major literature on free cashflow calculations and its implication on financial decision making. We also worked on data collection. Over spring and summer 2026, we plan to work with a summer research scholar to run preliminary empirical analysis to: (1) investigate the dispersions in FCF figures across financial data providers (FDPs) and to evaluate the magnitude of discrepancies across firms in various industries, and (2) investigate dispersion for firms that voluntary disclose FCF figures to compare their values to the FCF values from FDPs. We will also collect other firm data and data related to analyst dispersion estimates.
Prerequisites
FIN221
Special Comments
Project Information (subject to change)
Estimated Start Date: 6/8/2026
Estimated End Date: 7/17/2026
Estimated Project Duration: 6 weeks
Maximum Number of Students Sought: 1
Research Location: Remote
Travel Required? No (If “yes”: )
Contact Information: Aliaa Bassiouny (email: abassiouny@wlu.edu)