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Peer Group Analysis
In economics, valuation using multiples, or "relative valuation", is a process that consists of: * identifying comparable assets (the peer group) and obtaining market values for these assets. * converting these market values into standardized values relative to a key statistic, since the absolute prices cannot be compared. This process of standardizing creates valuation multiples. * applying the valuation multiple to the key statistic of the asset being valued, controlling for any differences between asset and the peer group that might affect the multiple. Multiples analysis is one of the oldest methods of analysis. It was well understood in the 1800s and widely used by U.S. courts during the 20th century, although it has recently declined as Discounted Cash Flow and more direct market-based methods have become more popular. "Comparable company analysis", closely related, was introduced by economists at Harvard Business School in the 1930s. Valuation multiples A valuation mult ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economics
Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interactions of Agent (economics), economic agents and how economy, economies work. Microeconomics analyzes what's viewed as basic elements in the economy, including individual agents and market (economics), markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyzes the economy as a system where production, consumption, saving, and investment interact, and factors affecting it: employment of the resources of labour, capital, and land, currency inflation, economic growth, and public policies that have impact on glossary of economics, these elements. Other broad distinctions within economics include those between positive economics, desc ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Operating Margin
In business, operating margin—also known as operating income margin, operating profit margin, EBIT margin and return on sales (ROS)—is the ratio of operating income ("operating profit" in the UK) to net sales, usually expressed in percent. : \text = \frac . ''Net profit'' measures the profitability of ventures after accounting for all costs.Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; David J. Reibstein (2010). ''Marketing Metrics: The Definitive Guide to Measuring Marketing Performance.'' Upper Saddle River, New Jersey: Pearson Education, Inc. . The Marketing Accountability Standards Board (MASB) endorses the definitions, purposes, and constructs of classes of measures that appear in ''Marketing Metrics'' as part of its ongoinCommon Language: Marketing Activities and Metrics Project. ''Return on sales (ROS)'' is net profit as a percentage of sales revenue. ROS is an indicator of profitability and is often used to compare the profitability of companies and industrie ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Peer Universe
Peer may refer to: Sociology * Peer, an equal in age, education or social class; see Peer group * Peer, a member of the peerage; related to the term "peer of the realm" Computing * Peer, one of several functional units in the same layer of a network; See Peer group (computer networking) ** Peer (networking), a computer system connected to others on a network ** Peer, a computer network in a voluntary interconnection of administratively separate Internet networks in peering Organizations * Partnership for European Environmental Research, a network of seven European environmental research centres * Public Employees for Environmental Responsibility, an organization of anonymous public employees promoting environmental responsibility People Given name * Peer Åström (born 1972), Swedish composer, lyricist, musician and record producer * Peer Guldbrandsen (1912–1996), Danish screenwriter, actor, film director and producer * Peer Hultberg (1935–2007), Danish author and psychoanal ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Forecast Period (finance)
In corporate finance, in the context of discounted cash flow valuation, the forecast period is the time period during which individual yearly cash flows are input to the valuation-formula. Cash flows after the forecast period are represented by a fixed number, the "terminal value", determined using assumptions relating to the sustainable compound annual growth rate or exit multiple. There are no fixed rules for determining the duration of the forecast period. However, choosing a forecast period of 10 years, for example, will not be meaningful when individual cash flows can only reasonably be modeled for four years; see Cashflow forecast. The number of forecasting years is therefore to be limited by the "meaningfulness" of the individual yearly cash flows ahead. Addressing this, there are three typical methods of determining the forecast period. #Based on company positioning: The forecast period corresponds to the years where an excess return is achievable. In the yea ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Discount Window
The discount window is an instrument of monetary policy (usually controlled by central banks) that allows eligible institutions to borrow money from the central bank, usually on a short-term basis, to meet temporary shortages of liquidity caused by internal or external disruptions. The term originated with the practice of sending a bank representative to a reserve bank teller window when a bank needed to borrow money. The interest rate charged on such loans by a central bank is called the discount rate, policy rate, base rate, or repo rate, and is separate and distinct from the prime rate. It is also not the same thing as the federal funds rate or its equivalents in other currencies, which determine the rate at which banks lend money to ''each other''. In recent years, the discount rate has been approximately a percentage point above the federal funds rate (see Lombard credit). Because of this, it is a relatively unimportant factor in the control of the money supply and is only t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Invested Capital
Net operating assets (NOA) are a business's operating assets minus its operating liabilities. NOA is calculated by reformatting the balance sheet so that operating activities are separated from financing activities. This is done so that the operating performance of the business can be isolated and valued independently of the financing performance. Management is usually not responsible for creating value through financing activities unless the company is in the finance industry, therefore reformatting the balance sheet allows investors to value just the operating activities and hence get a more accurate valuation of the company. One school of thought is that there is no such security as an operating liability. All liabilities are a form of invested capital, and are discretionary, so the concept of net operating assets has no basis because operating assets are not discretionary. NOA are mathematically equivalent to the invested capital (IC), which represents the funds invested into t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Free Cash Flow
In corporate finance, free cash flow (FCF) or free cash flow to firm (FCFF) is the amount by which a business's operating cash flow exceeds its working capital needs and expenditures on fixed assets (known as capital expenditures). It is that portion of cash flow that can be extracted from a company and distributed to creditors and securities holders without causing issues in its operations. As such, it is an indicator of a company's financial flexibility and is of interest to holders of the company's equity, debt, preferred stock and convertible securities, as well as potential lenders and investors. Free cash flow can be calculated in various ways, depending on audience and available data. A common measure is to take the earnings before interest and taxes, add depreciation and amortization, and then subtract taxes, changes in working capital and capital expenditure. Depending on the audience, a number of refinements and adjustments may also be made to try to eliminate distortion ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
NOPLAT
Net operating profit less adjusted taxes (NOPLAT) refers to after-tax EBIT adjusted for deferred taxes, or NOPAT + net increase in deferred taxes. It represents the profits generated from a company's core operations after subtracting the income taxes related to the core operations and adding back in taxes that the company had overpaid during the accounting period. It excludes income from non-operating assets or financing such as interest and includes only profits generated by invested capital. NOPLAT is the profit available to all equity stake holders including providers of debt, equity, other financing and to shareholders. NOPLAT is distinguished from net income which is the profit available to equity holders only.Valuation, 6th ed., Koller, et al, p. 171, McKinsey & Co. NOPLAT is often used as an input in creating discounted cash flow valuation models. It is used in preference to Net Income as it removes the effects of capital structure (debt vs. equity). NOPLAT minus the moneta ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
