Dear AFP Members,
These are pivotal days for anyone in finance. Growing evidence suggests that companies are about to put their sidelined cash to work. This is no small task. Decisions about where to allocate the cash can define the future of your company.
Before making a strategic investment, the first step for many companies is calculating the cost of capital. In this issue of Exchange, a new survey of AFP members shows a broad range of ideas about what constitutes the “right” approach to cash flow forecasting and estimating the cost of capital used in project valuation.
We believe we have produced a unique core of information that will help advance cost of capital evaluation from the art it is today to the science that it needs to become.
Over time, AFP is seeking to define best practices for evaluating cost of capital. As you know, good project selection can set the stage for long-term advantages for your organization, including revenue growth, lower expenses, better productivity, and innovations in products and services. On the other side, making investments in the wrong projects can erode your competitiveness and hurt your profitability.
Cost of capital information is part of AFP’s commitment to providing information to executives involved in corporate financial planning and analysis, so be sure to check out the FP&A resources on www.afponline.org/FPA.
President and CEO
Association for Financial Professionals