A method used to estimate the value of firms is the discounted cash flow projection. Such projection gives rise to an array of numbers, the last and not the least being the strategic change in net cash.
If the company is ready for sustainable cash flows, financial theories (Gordon Shapiro, CAPM, Merton …) will not fail to assign it a “fair value”.
But the true meaning of risk is the emergence of adverse scenarios which needs modeling as well.
The strategic business analysis leads to a forecast model. The forecast model reinforces the consistency of a strategic business analysis.
Win win situation ? …
Dominique F. Pasquier