ROIC
ROIC > RONIC
It is essential to accurately forecast the new and stable ROIC, or RONIC, for future horizon predictions. Theoretically, if competition increases alongside organizational capabilities, the margin of error […]
EON Investment Insights
Understand stock price as a forecast
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DCF Valuation
Competitive Equilibrium
For calculating the value after the horizon, it’s necessary to explain the stability of financial indicators. What does this mean? NOPAT – must be normalized. This is the […]
DCF Valuation
Terminal Value Weight
Valuation Breakdown by Time Periods When breaking down an organization’s value into near-term and long-term components, the proportion of these two parts varies across different sectors. However, the […]
Growth
Forecast Errors
Valuation Forecasting: Three Crucial Moments to Consider for Error Mitigation: Source: #VALUATION – Measuring and Managing the Value of Companies7th EditionMcKinsey & CompanyTim Koller, Marc Goedhart, David Wessels
Market Multiples
Financial Health Multiples
Key Factors for Assessing an Organization’s Financial Health When evaluating an organization, in addition to making forecasts, we need to observe financial health multipliers. Here are some important […]
Growth
Organic Growth
Observe the photo: on the left is an organization that grew rapidly and then experienced a sharp decline in its growth rate, while on the right is an […]
Growth
Revenue Forecast
After cleansing historical indicators, assumptions, and budgetary standards, we should attempt to identify revenue in operational forecasts. For example: Revenue = (Revenue / Unit) * Unit What drives […]
ROIC
Operating Lease vs ROIC
Translation for Professionals: The capitalization of operating leases significantly impacts ROIC. On one hand, it increases NOPAT by the implied interest rate, while on the other hand, it […]
Growth
Operating Multiples
When evaluating an organization, it is also interesting to use non-financial indicators. For example, one organization has a better margin than another, but what does this mean? Which […]
ROIC
Decomposition of ROIC
To gain a better understanding of the organization, it’s interesting to break down ROIC into components and analytically compare it with competitors. For example, as shown in the […]
DCF Valuation
Reorganized Profit/Loss
Reorganizing the Profit and Loss Statement for NOPAT Calculation Just as the balance sheet is reorganized to calculate Invested Capital, the profit and loss statement is reorganized to […]
DCF Valuation
Reorganized Balance
One Aspect I Appreciated About McKinsey’s Approach to Organizational Valuation Technology One aspect I appreciated about McKinsey’s approach to organizational valuation technology is the method of reorganizing financial […]
Other Valuation Methods
Valuation Methods
The table outlines the main models for organizational valuation. Here are my comments: P.S.Apart from these, there are also valuation methods using multiples and real options, which are […]
Growth
Growth in Long-term
Why is it almost impossible to maintain a high sales growth rate over the long term? It’s like the compound interest formula. Initially, growth is easy, but it […]
ROIC
ROIC = Competitive Advantage
Do you know what gives your organization a competitive advantage? The most significant measure of competitive advantage is ROIC (Return on Invested Capital), and here’s why: ROIC = […]
Market Efficiency
Value Driver Myths
The diagram shows what creates the investor’s value. All other things are myths about value drivers… Let’s summarize in two words: *Source: VALUATION – Measuring and Managing the […]
ROIC
Margin vs Capital-productivity
ROIC can be improved in two ways: by increasing operational efficiency or reducing the amount of capital needed for operations – for example, by optimizing inventory.
Growth
ROIC & Growth
Organizations with low #ROIC often think they should focus on growth because growth inherently creates opportunities for increasing #ROIC. But this doesn’t necessarily happen in practice. Especially when an organization is in a growth phase, meaning rapid growth, it doesn’t…