DCF Valuation
From Corporate Value to Stock Price
The table outlines the breakdown of the organization’s value into various components. This is the same as the economic balance. To determine the fair price per share, we […]
EON Investment Insights
Understand stock price as a forecast
“I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines” - Charlie Munger
Sources→Ideas→Frameworks
Knowledge library
Find the idea you need.
Search articles or combine Reader Level, Idea, Subtopic, and Source filters.
339 articles
Newest research first.
Market Efficiency
Isocurves
If the conclusion about the stock price resulting from your evaluation does not match the market price, it most often means that you missed something, something the market thinks differently about…
WACC, CoC, Structure
Market Return
An Interesting Approach Used by McKinsey for Calculating Market Expected Returns: Aggregating Current Stock Prices and Expected Fundamentals The fundamental formula for value creation can be expressed solely […]
WACC, CoC, Structure
WACC – Details
The statistically derived beta of an organization is highly volatile, with even one standard deviation often being significant. Therefore, industrial betas or betas from several organizations are taken, […]
DCF Valuation
Long-term Forecast
Simplifying horizon forecasts with formulas also imposes some limitations. Such situations are visible in photos, how forecasts are made under uncertain conditions for ROIC. Assuming ROIC = WACC. […]
DCF Valuation
Value Components
Valuation in Innovative Organizations In highly innovative organizations, it is often thought that the entire value of the organization lies beyond the horizon, increasing uncertainty and skepticism about […]
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 […]
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 […]