Normalised Earnings

These are the cash flows used to calculate the Internal Rate of Return for the company over the review period. IRR is one of the options that can be chosen for the FS NROE. The cash flows measure the cash movements that would take place if a person bought the company outright in the year for an amount equal to beginning equity and then sold the company after year five for an amount equal to ending equity.

Related definitions:

FS NROE

 

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