Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )

11 E.I.Altman,“FinancialRatios,DiscriminantAnalysisand thePredictionofCorporateBankruptcy,”JournalofFinance (1968);foramoreupdat ...

18 Thetaxrateinyear 10 islessthan 35 percentbecauseof thenet operating lossescarried forward from theprevious year. 19 Toestimat ...

CHAPTER 18 Closing Thoughts Theproblem in valuationis not thatthere arenot enough models to value an asset; it is that there are ...

Thereareatleasttwowaysin whichwecanvaluea firm using asset-based valuation techniques. One is liquidation value,whereweconsiderw ...

forfirms/assetswhosecurrentearningsmaybedistortedby either temporary factors or cyclical effects. Inthecontextofmultiplesusedinr ...

Theapproachthatweusetovalueabusinesswilldependon how marketable its assets are, whether it generates cash flows, and how unique ...

Cash Flow Generating Capacity Wecan categorize assets intothree groups based on their capacity to generate cash flows—assets tha ...

collection, or fine art. These assets can only be valued using relative valuation models. Figure18.3providesthespectrumofvaluati ...

Analyst Characteristics and Beliefs Thevaluationapproachthatwechoosetousewilldependon ourtimehorizon,thereasonwearedoingthevalua ...

Reason for Doing the Valuation Analystsvaluebusinessesforanumberofreasons,andthe valuationapproachusedwillvarydependingonthereas ...

Embeddedineachapproachareassumptionsaboutmarkets andhowtheyworkorfailtowork.Withdiscountedcashflow valuation,weareassuming thatm ...

enoughthoughtgoesintotheprocessofmodelchoice.There isnoone “best”model.Theappropriatemodelto useina particular setting will depe ...

work with assumptions about dollar debt rather than debt ratios, you can switch to the adjusted present value approach. In valui ...

abnormallyhighorlow—a firm’searningsareabnormalif they do not fit in with the firm’s own history of earnings. Whenearningsareneg ...

Firms with long-term operating, strategic, or financial problems can have extended periods of negative or low earnings. If we r ...

Growth Patterns Ingeneral,whenvaluingafirm,wecan(1)assumethatthe firm is already in stable growth, (2) assume a period of consta ...

discountedcashflowmodelshouldprovideenoughflexibility intermsofcapturingchangesintheunderlyingcharacteristics ofthefirm.Athree-s ...

Competence of the firm’s management. More competentmanagementwillbeabletoslow,though notstop,thelossofcompetitiveadvantageovert ...

InChapter 13 onvaluingcontrol,wenotedthatthevalueofa firm can be substantially higher if we assume that it is optimallyrunthanif ...

Manyanalystschoosetovalueassetsusingrelativevaluation models.Inmakingthischoice,twobasicquestionshavetobe answered:Whichmultiple ...