Total cash generated by the company's basic ongoing activities in each period. These future cash flows, when discounted at today's currency amounts, become the Present Value of Cash Flow (v5010) and are added to the Present Value of Residual Value (v5220) to calculate Corporate Value (v5060).
Do not confuse Cash Flow from Operations (v4100.00) with total cash flow. Total cash flow also includes nonoperating accounts (those unrelated to basic business operations). Examples of nonoperating accounts that are included in total cash flow but excluded from Cash Flow from Operations (v4100.00):
Financing-related accounts (sale of stock or interest expense)
Investments in bonds and stock
Extraordinary accounts
Nonoperating cash flow accounts are excluded from Cash Flow from Operations (v4100.00)—and therefore from the calculation of Shareholder Value (v5070)—because it is inappropriate to use the same cost of capital for nonoperating and operating cash flows, which may have different risk characteristics. Nonoperating investments do have a value to the company, which is why Marketable Securities (v2010) and Investments in Bonds and Stock (v5.00.560) are added to the Cum. PV of Cash Flows (v5020) and Residual Value (v5030) in calculating Corporate Value (v5060).
The rationale for distinguishing between operating and nonoperating cash flows for valuation purposes is based on a fundamental tenet of modern financial theory: The discount rate applied to a stream of cash flows should reflect the risk specific to those cash flows.