Time Value of Money

The time value of money is the concept that the money that is received today is higher than the money that is received in the future, meaning that the dollar that the company receives today is higher in value than the dollar that is received after a year, due to inflation.

The time value of money is the concept that money received today is worth more than the same amount received in the future due to inflation and earning potential.

- Used in treasury and financial management for funding, investment, and risk decisions.
- Used to evaluate cash flows, financing costs, and capital structure.

- Example: Finance teams use **Time Value of Money** when planning funding needs and managing cash and risk.

- Why it matters: Supports liquidity and risk control and improves the quality of financing and investment decisions.