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

Different tax and

reporting books

Headquarters in tax

havens

Volatile effective tax

rate

Effective tax rate is

meaningless

Maneuvers to reduce

taxes can lead to

complexity

Forecasting tax rate

becomes difficult

Capital
expenditures

Volatile capital

expenditures

Frequent and large

acquisitions

Stock payment for

acquisitions and

investments

Forecasting becomes

difficult

Requires

normalization over

several years

Difficult to figureout

howmuchacquisitions

cost

Working
capital

Unspecified current

assets and current

liabilities

Volatile working

capital items

Becomes repository

for miscellaneous

assets

Forecasting working

capital needs is

difficult

Expected
growth rate

Off-balance-sheet

assets and liabilities

(operating leases and

R&D)Historyofstock

buybacks

Restructuring charges

Acquisitions and

goodwill

Changing return on

capital over time

Makes measuring

capital invested

difficult

Pushes down book

value of equity and

increases returns

Pushes down book

value of equity and

increases returns

Measuring return on