A Mathematical Theory of Accounting and Financial Value : An Investigation on the Net Present Value

This paper proposes a theory of accounting able to describe future or fictious economic operations over time in simple mathematical and accounting terms. This theory proves its generality in a reformulation of the net present value model, a core theoretical model in finance mainly based on discounted future operations cash flows, which will become the entry point for accounting in the field of finance. Key to the functioning of companies, the net present value and its related indicators will illustrate how their inner limits and levers can be described in fundamental accounting terms. This original approach makes it possible to combine and study the roles of economic factors like prices, volumes, payment terms, growth, financing, etc. The mathematical features of this theory of accounting will unveil links or symmetries between economic levers and financial limits, as a comprehensive perspective to investment decisions and to the enhancement of companies' value