Financial Results Fluctuations as a Determinant of a Business Value Increase

Assumptions of financial results forecast together with the discount rate play a key role in the process of valuation by the discounted cash flow method. The authors tried to answer the question whether financial results could be forecast based on historical financial reports; whether the changes experienced by a business in the past determined future financial results fluctuations? And consequently, is it possible to forecast the increase rate in the residual period in the real approach? This rate signifies results fluctuations of a business in the up-to-infinity period in relation to the whole economy growth.The article examines the problem of future fluctuations of such economic terms as: revenues, operating profit, and cash flows, all based on historical changes.