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 […]
EON Investment Insights
Understand stock price as a forecast
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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…
Growth
Growth Ways
The growth of an organization can occur through various means, and as statistics show, not every approach yields the same results in creating value.
Growth
ROIC & Growth => CF
The amount of generated free cash flow is dependent on growth and return on invested capital (ROIC).
Mergers & Acquisitions
Re-rating Illusion
It’s a widely spread misconception when investors believe that purchasing a company with a high P/E ratio from a company with a low P/E ratio automatically corrects both ratios to the higher one and not the average…
Growth
#TSR Decomposition
Even good fundamental indicators do not necessarily mean good profitability for investors, as profitability can affect the investment price of shares, which, apart from fundamental data, depends on […]
Market Efficiency
ESG Investing
ESG Investment: A Strategic Perspective for Business Executives Today, ESG (Environmental, Social, and Governance) investment is trending. You’ll find ESG ratings of corporations on brokerage platforms and other […]
Cross-Border Valuation
CoC in Cross-Border Valuation
When discounting cross-border cash flows, several questions arise: which country’s cost of capital should be used? In which currency? And how should the beta of a subsidiary company […]
Cross-Border Valuation
Real vs Nominal Projections
When inflation is very high, it becomes difficult to make forecasts in both real and nominal terms. Therefore, it becomes necessary to involve hybrid mechanisms. The table shows […]
ROIC
ROIC or CFROI
In the vast majority of cases, ROIC is a good measure of efficiency, but there are instances where it doesn’t work well, and it is replaced by the […]
Risk
Upside vs Downside β
The beta coefficient is very useful for assessing an organization’s risk. It describes well how the stock price responds to changes in the overall market index, which in turn indicates systematic risk and, consequently, the expected return.
Market Efficiency
Insurance Business Model
Why insurance is not profitable in the direct sense and the source of profit is an investment activity? There is such a term – Combined Ratio – which […]
Market Efficiency
Share Repurchase
What time do companies buy their own shares? With simple intuition – when they have a market price below a fair price … though there are some interesting […]