Analyzing Valuation Measures: A Performance Horse-Race .
Analyzing Valuation Measures:A Performance Horse-Race over the past 40 Years.Wesley GrayDrexel University101 N. 33rd StreetAcademic Building 209Philadelphia, PA 19104wgray@drexel.eduJack VogelDrexel University101 N. 33rd StreetAcademic Building 209Philadelphia, PA 19104jrv34@drexel.eduJanuary 2012Electronic copy available at: http://ssrn.com/abstract 1970693
Analyzing Valuation Measures:A Performance Horse-Race over the past 40 Years.ABSTRACTWe compare the investment performance of portfolios sorted on different valuationmeasures. EBITDA/TEV has historically been the best performing metric and outperformsmany investor favorites such as price-to-earnings, free-cash-flow to total enterprise value, andbook-to-market. We also explore the investment potential of long-term valuation ratios, whichreplaces one-year earnings with an average of long-term earnings. In contrast to prior empiricalwork, we find that long-term ratios add little investment value over standard one-year valuationmetrics.JEL Classification: G10, G14Key words: enterprise multiple, price to earnings, price to book, free cash flow, gross profits,valuation metricsElectronic copy available at: http://ssrn.com/abstract 1970693
We address a basic research question: Which valuation metric has historically performedthe best? Practitioners have relied on a variety of valuation measures, including price to earnings(P/E), and total enterprise value to earnings before interest and taxes and depreciation andamortization (TEV/EBITDA). Meanwhile, academic research (e.g., Fama and French [1992])has traditionally relied on the book to market ratio (B/M) and the more recent gross profitsmeasure (GP) introduced by Novy-Marx [2010].Eugene Fama and Ken French consider B/M a superior metric for the following reason:We always emphasize that different price ratios are just different ways toscale a stock’s price with a fundamental, to extract the information in the crosssection of stock prices about expected returns. One fundamental (book value,earnings, or cashflow) is pretty much as good as another for this job, and theaverage return spreads produced by different ratios are similar to and, instatistical terms, indistinguishable from one another. We like BtM because thebook value in the numerator is more stable over time than earnings or cashflow,which is important for keeping turnover down in a value portfolio. 1As stated above, Fama and French suggest that different price ratios are “pretty much as good asanother for this job [explaining returns].” We beg to differ. We find economically andstatistically significant differences in the performance of various valuation metrics. Specifically,we examine a large swath of pricing metrics (all expressed in “yield” format): Earnings to Market Capitalization (E/M) Earnings before interest and taxes and depreciation and amortization to totalenterprise value , accessed11/15/2011
Free cash flow to total enterprise value (FCF/TEV) Gross profits to total enterprise value (GP/TEV) Book to market (B/M) Forward Earnings Estimates to Market Capitalization (FE/M)Over the 1971 through 2010 period analyzed, we find that EBITDA/TEV is the bestvaluation metric to use as an investment strategy relative to other valuation metrics (Loughranand Wellman 2009 find similar results). The returns to an annually rebalanced equal-weightportfolio of high EBITDA/TEV stocks, earn 17.66% a year, with a 2.91% annual 3-factor alpha(stocks below the 10% NYSE market equity breakpoint are eliminated). This compares favorablyto a practitioner favorite, E/M (i.e., inverted Price-to-earnings, or P/E). Cheap E/M stocks earn15.23% a year, but show no evidence of alpha after controlling for market, size, and valueexposures. The academic favorite, book-to-market (B/M), tells a similar story as E/M and earns15.03% for the cheapest stocks, but with no alpha. FE/M is the worst performing metric by awide margin, suggesting that investors shy away from using analyst earnings estimates to makeinvestment decisions.We find other interesting facts about valuation metrics. When we analyze the spread inreturns between the cheapest and most expensive stocks, given a specific valuation measure, weagain find that EBITDA/TEV is the most effective measure. The lowest quintile returns based onEBITDA/TEV return 7.97% a year versus the 17.66% for the cheapest stocks—a spread of9.69%. This compares very favorably to the spread created by E/M, which is only 5.82% (9.41%for the expensive quintile and 15.23% for the cheap quintile).Valuation metrics that incorporate last year’s earnings or forward earnings are interesting,but what about “long-term” valuation metrics? Going back to the 1930s, practitioners have
promoted the concept of using “normalized earnings” in place of simple one-year earningsestimates. For example, Graham and Dodd (1934, p. 452) speak to the use of current earnings inthe context of valuation metrics: “[earnings in P/E] should cover a period of not less than fiveyears, and preferably seven to ten years.”More recently, academics such as Campbell and Shiller [1998], suggest that annualearnings are noisy as a measure of fundamental value. Anderson and Brooks [2006] conduct arobust study of long-term P/E ratios and find evidence that using a long-term earnings average(8-years) in place of one-year earnings increases the spread in returns between value and growthstocks by 6% (their evidence is on the UK stock market from 1975 through 2003). We are unableto replicate this result in the US stock market and find mixed results with long-term valuationmeasures.DataData DescriptionOur data sample includes all firms on the New York Stock Exchange (NYSE), AmericanStock Exchange (AMEX), and Nasdaq firms with the required data on CRSP and Compustat. Weonly examine firms with ordinary common equity on CRSP and eliminate all REITS, ADRS,closed-end funds, utilities, and financial firms. We incorporate CRSP delisting return data usingthe technique of Beaver, McNichols, and Price [2007]. To be included in the sample, all firmsmust have a non-zero market value of equity as of June 30th of year t. We construct our valuationmeasures according to the following formula: Total Enterprise Value (TEV)o Similar to the Loughran and Wellman [2011], we compute TEV as:
TEV Market Capitalization (M) Short-term Debt (DLC) Long-term Debt (DLTT) Preferred Stock Value (PSTKRV) –Cash and Short-term Investments (CHE). This variable is used inmultiple valuation measures. Earnings to Market Capitalization (E/M)o Following Fama and French [2001], we compute earnings as: Earnings Earnings Before Extraordinary Items (IB) – PreferredDividends (DVP) Income Statement Deferred Taxes (TXDI), ifavailable. Earnings before interest and taxes and depreciation and amortization to totalenterprise value (EBITDA/TEV)o EBITDA Operating Income Before Depreciation (OIBDP) Nonoperating Income (NOPI). Free cash flow to total enterprise value (FCF/TEV)o Similar to the Novy-Marx [2010] paper, we compute FCF and as: FCF Net Income (NI) Depreciation and Amortization (DP) Working Capital Change (WCAPCH) - Capital Expenditures(CAPX). Gross profits to total enterprise value (GP/TEV)o Following Novy-Marx [2010], we compute GP as: GP Total Revenue (REVT) – Cost of Goods Sold (COGS).Book to market (B/M)o Similar to Fama French [2001], we compute Book Equity as:
o Book Equity Stockholder's Equity (SEQ) [or Common Equity(CEQ) Preferred Stock Par Value (PSTK) or Assets (AT) Liabilities (LT )] – Preferred Stock (defined below) BalanceSheet Deferred Taxes and Investment Tax Credit (TXDITC) ifavailable. Preferred Stock Preferred Stock Redemption KL), or Preferred Stock Par Value (PSTK)]. Forward Earnings Estimates / Market Capitalizationo Forward Earnings Consensus I/B/E/S earnings forecast of EPS forthe fiscal year (Available 1982 through 2010).o Mean of all analyst annual forecasts issued between March 31stand June 30th of year t for each firm.We used this threemonth window to capture the most recent analyst forecasts.We restrict our data to include only those firms that have 8 years of data for all thenecessary metrics described above (except FE/M). We impose this restriction to ensure we canconduct all the necessary analysis on a similar universe when we perform the long-termvaluation tests. To ensure there is a baseline amount of liquidity in the securities in which weperform our tests, we restrict our analysis to firms that are greater than the 10 percentile NYSEmarket equity breakpoint at June 30th of each year.Stock returns are measured from July 1971 through December 2010. Firm size (e.g.,market capitalization) is determined by the June 30th value of year t. Firm fundamentals arebased on December 31st of year t-1 (for firms with fiscal year ends between January 1st and
March 31st we use year t fundamentals; for firms with fiscal year ends after March 31st we useyear t-1 fundamentals). Firms are sorted into quintiles on each measure on June 30th of year t,and this value is used to compute the monthly returns from July of year t to June of year t 1.Equal-weight and value-weight portfolio returns are buy and hold.Exhibit 1: Summary Statistics: CRSP Universe Compared to SampleThis table reports summary statistics for CRSP stocks with information on all the variables in the table compared to all stockswith 8 years of data for all variables in the table. The returns are from July 1st, 1971 until December 31st, 2010. This sampleexcludes financials and utilities, and all firms below the NYSE 10% market capitalization cutoff. These sample statistics donot require firms to have a forward earnings estimate. The portfolio is formed each year on June 30th, and held for one year.The market value of equity (ME) is measured on June 30th each year. B/M is defined as (stockholder’s equity deferredtaxes and investment tax credit preferred stock redemption value) divided by ME. Leverage is defined as long term debtdivided by the book value of assets (described above for B/M). Ret(-2,-12) is the buy-and-hold return from the previous July(t-1) through May (t). Volatility is the standard deviation of daily returns computed over the past year (250 trading days).Turnover is the average daily share turnover during the past year (250 trading days).Panel A: ALL CRSP Stocks Common StocksME Mean21980.6080.4810.2270.0420.00725th 4780.2690.1160.0240.00375th Percentile10010.8190.6230.4000.0340.007ME Mean31640.6650.4740.2000.0410.00625 5440.3170.1100.0230.00375th Percentile15460.8820.6400.3690.0310.006Panel C: All Stocks with 8 years of datathData Summary StatisticsExhibit 1 outlines the summary statistics. This table highlights that our universe, whichincludes only firms with 8 full years of data for all the variables, is similar to a universe whichonly requires firms to have 1 year of data. While the 8 year universe firms are larger than the 1year firms, we see that B/M, leverage, momentum, volatility, and turnover are similar for the 1
and 8 year universes. We replicate all our analysis using universes that are less constrained thanour requirement that all firms have 8 years of data necessary to calculate all the valuation metricsanalyzed; all results are similar.Results: A Comparison of Valuation MetricsValuation Metric PerformanceWe analyze the compound annual growth rates (CAGR) of each valuation metric over the1971 to 2010 period for equal-weight and value-weight portfolios. Exhibit 2 shows the returns tothe portfolio quintiles sorted on cheap (quintile 5) and expensive (quintile 1). Each valuationmetric captures the well-known spread in returns between cheap stocks (i.e., value) andexpensive stocks (i.e, growth). But not all valuation metrics are created equal. For example,FCF/TEV does a decent job capturing the returns for cheap stocks (16.57%), but has little abilityto identify low-returning growth stocks (11.03%). However, high EBITDA/TEV stocks earn17.66% relative to low EBITDA/TEV stocks, which earn a meager 7.97%. On an absolute returnbasis, evidence suggests that EBITDA/TEV is superior to alternative valuation measures. 2To assess risk-adjusted performance, we control for exposures to the market, size, andvalue factor, and calculate 3-factor Fama and French alpha estimates for each of the quintileportfolios (See Exhibit 2, Panel B). E/M and B/M strategies show no alpha after controlling forthe 3-factor model. This is not particularly surprising since B/M is one of the factors in the 3factor model, and B/M and E/M are highly correlated. Nonetheless, alternative valuation metricssuch as EBITDA/TEV, GP/TEV, and FCF/TEV, actually provide economically and statisticallysignificant alphas. There is also weak evidence that FCF/TEV can identify overvalued stocks, asevident by the -1.96% alpha on the most expensive FCF/TEV quintile. We conduct the same2We perform all analysis with EBIT/TEV in place of EBITDA/TEV and find nearly identical results.
analysis over the more recent 1991 to 2010 period and find similar results (results not shown, butavailable upon request).The value-weight portfolios show less pronounced results compared to the equal-weightportfolios, suggesting valuation metrics are more effective in smaller stocks. For example, thevalue-weight portfolio returns for EBITDA/TEV, which put more weight on larger stocks, earn a14.39% return for cheap stocks and an 8.16% for expensive stocks. And while there is no clear“best” strategy for the value-weight results, evidence suggests that EBITDA/TEV and GP/TEVhave the best performance, but all strategies have approximately the same return and the samespreads between cheap and expensive.The alpha for value-weight portfolios tells a similar story as the equal-weight portfolios.There is evidence that EBITDA/TEV and FCF/TEV add value. EBITDA/TEV has a 2.48%annual alpha and FCF/TEV has a 2.22% annual alpha. The other valuation metrics have nostatistically reliable alpha in the context of the Fama and French 3-factor model.
Exhibit 2: One-Year Valuation Measure PerformanceThis table reports return statistics for CRSP stocks with 8 years of data for all variables in the table. The returns are from July 1st, 1971 until December 31st, 2010. Thissample excludes financials and utilities, and all firms below the NYSE 10% market capitalization cutoff. The sample is sorted into quintiles on June 30th of each year, andeach portfolio is held for one year. Panel A reports the annual returns (equal and value-weighted) for each quintile portfolio based on one of the following valuationmeasures: E/M, EBITDA/TEV, FCF/TEV, GP/TEV, and B/M. Panel A also reports the returns of the equal and value-weight market. Quintile 1 holds “growth” stocks,whereas quintile 5 contains “value” stocks. Last, Panel A compares the returns of the “value” and “growth” stocks for each valuation measure in the 5-1 row. Panel Breports the Fama-French 3-factor alpha for each valuation measure sorted again by quintiles. Alphas are monthly estimates times 12. T-statistics are shown in bracketsbelow each alpha value in Panel B.Equal-weight portfolioE/MValue-Weight TEVFCF/TEVGP/TEVB/MVWMktPanel A:Annual anel B:3-Factor Alpha1(Low)2345(High)
Valuation Metric RiskExhibit 3 presents common risk metrics for the valuation measures. Panel A highlightsthe results for cheap stocks (i.e., “value”). The valuation metrics are similar in character,although EBITDA/TEV and FCF/TEV stand out with favorable Sharpe and Sortino ratios (seeExhibit 3, Panel A). For example, EBITDA/TEV has a monthly Sortino of .26, which comparesfavorably to all other metrics. Max drawdowns are similar across all portfolios, however, thevalue-weight EBITDA/TEV and FCF/TEV portfolios have max drawdowns that are considerablysmaller than the other portfolios. Overall, the cheapest-ranked stock portfolios have riskcharacteristics that are similar, if not superior, to the buy-and-hold equal-weight and valueweight benchmarks.With respect to the most expensive stocks (i.e., “growth”), the results suggest that buyingexpensive securities is a poor risk-adjusted bet (see Exhibit 3, Panel B). Max drawdowns, Sharperatios, and Sortino ratios are uniformly worse for expensive stocks relative to cheap stocks,regardless of the valuation metric employed. Moreover, on every metric, the expensive stocksunderperform the buy-and-hold benchmarks.Exhibit 4 shows the drawdowns for EBITDA/TEV. Both Panels A and B (value andequal weighted portfolios) show that “cheap” stocks (value) have better drawdown measuresthan “expensive” stocks (growth), or CRSP and SP500 stocks.Looking at the worstperformance over 60 months, we see that “cheap” EBITDA/TEV stocks vastly outperform themarket.
Exhibit 3: One-Year Price Measure Risk MetricsThis table reports return statistics for CRSP stocks with 8 years of data for all variables in the table. The returns are from July 1st, 1971 until December 31st, 2010. Thissample excludes financials and utilities, and all firms below the NYSE 10% market capitalization cutoff. The sample is sorted into quintiles on June 30th of each year, andeach portfolio is held for one year. Panels A and B report return statistics (equal and value-weighted) based on one of the following valuation measures: E/M,EBITDA/TEV, FCF/TEV, GP/TEV, and B/M. Panel A reports the return statistics for the “value” stocks (quintile 5 in Exhibit 2) for each valuation measure. Panel Breports the return statistics for the “growth” stocks (quintile 1 in Exhibit 2) for each valuation measure.Equal-weight portfolioE/MValue-Weight PortfolioEBITDA/TEVFCF/TEVEW MktGP/TEVB/ME/MEBITDA/TEVFCF/TEVGP/TEVB/MVW MktPanel A: ValueMonthly Sharpe .10Monthly 00.15Worst -45.89%-42.50%-41.94%-54.61%-53.02%-51.57%Worst 12 .73%-36.52%-34.38%-41.40%-47.04%-44.21%Worst 21.59%-21.50%-22.18%-22.73%-27.95%-22.54%Monthly Sharpe .10Monthly 30.15Worst -57.48%-72.85%-61.81%-69.83%-54.23%-51.57%Worst 12 .56%-60.73%-54.45%-50.92%-45.57%-44.21%Worst 27.01%-26.72%-28.36%-25.15%-22.22%-22.54%Panel B: Growth
Exhibit 4, Panel A : Value-Weight drawdown analysis for EBITDA/TEV(July 1, 1971 to December 31, 2010).Exhibit 4, Panel B: Equal-weight drawdown analysis for EBITDA/TEV(July 1, 1971 to December 31, 2010).Forward-Looking EstimatesWe repeat our analysis on all one-year valuation metrics, to include consensus forwardearnings estimates to market capitalization (FE/M). The period we analyze is from July 1, 1982through December 31, 2010 due to data limitations from I/B/E/S. Our results can be summarized
as follows: The top-ranked FE/M quintile performs considerably worse than all other measures. 3For example, over the 1982-2010 time period the CAGR for the top performing FE/M quintile is8.63%. This compares poorly with the value-weight market return of 11.73% and the worstperforming valuation measure B/M (earned a 13.63% over the same period). Moreover, thesereturns strongly underperformed the best performing metric, EBITDA/TEV (earned 16.37%from 1982-2010). The evidence suggests that investors should be weary of using forwardearnings estimates in their valuation toolkit.Results: Examining Long-Term Valuation MeasuresLong-Term Valuation Metric PerformanceThe central hypothesis proposed by proponents of long-term valuation metrics is that“normalizing” earnings decreases the noise of the valuation signal and therefore increases thepredictive power of the metric. We test this conjecture and highlight the results in Exhibit 5. Ineach column of Exhibit 5 we represent a different perturbation of the long-term valuation metric.For example, the 2yr column uses the 2-year average of the numerator for the valuation metric.In the case of EBITDA/TEV, this is represented by the following equation: 𝑛𝑗 1 ��𝐴/𝑇𝐸𝑉𝑛 𝑇𝐸𝑉(1)Turning to Exhibit 5, we find little evidence that normalizing the numerator for avaluation metric has any ability to predict higher portfolio returns. If anything, the evidencesuggests that the one-year valuation measure is superior to normalized metrics. We are alsounable to replicate the findings from Anderson and Brooks [2006]. These authors find evidencethat the use of long-term valuation metrics increase the spread between value stocks and growth3Full results not tabulated, but available upon request.
stocks by 6 percent a year in the UK stock market. In contrast to their results, we find that thespread between value and growth stocks are very similar across different normalizing periods.Exhibit 5: Long-Term versus Short-Term Valuation MeasuresThis table reports return statistics for CRSP stocks with 8 years of data for all variables in the table. The returns are fromJuly 1st, 1971 until December 31st, 2010. This sample excludes financials and utilities, and all firms below the NYSE 10%market capitalization cutoff. The sample is sorted into quintiles on June 30th of each year, and each portfolio is held for oneyear. Panels A and B report return statistics based on one of the following valuation measures: E/M, EBITDA/TEV,FCF/TEV, GP/TEV, and B/M. The 1 year valuation measure indicates that the measure is constructed using the currentnumerator and current denominator for each measure. All other year valuation measures (2 years – 8 years) take the averageof the numerator over the past N years, and divide this average by the current denominator. For example, the 8 yearFCF/TEV measure is constructed by averaging the past 8 years FCF for each company (including the current observation),and dividing this by the company’s current TEV. Panel A reports the equal-weighted return statistics for the “value” stocks(quintile 5) for each valuation measure. Panel B reports the value-weighted return statistics for the “growth” stocks (quintile1) for each valuation measure. Both panels A and B also compare the “value” and “growth” portfolios by looking at thespread (value – growth).Panel A: Equal-WeightEW 2%16.79%15.77%16.59%15.36%EW 07%8.04%8.02%7.99%Spread %9.49%4.49%8.36%7.35%5.61%9.42%3.95%8.36%7.34%
Exhibit 5: Long Term Valuation Measures (continued)Panel B: 8.98%8.19%10.38%8.41%8.91%7.92%8.00%7.80%10.48% 10.14%9.49%8.09%8.07%7.95%8.64%8.54%8.45%Spread 6.18%Results: Robustness of Valuation Metrics across the Business CycleGiven the analysis thus far, EBITDA/TEV is arguably the best performing valueinvestment strategy (on a risk-adjusted basis); however, one can imagine a world where aparticular valuation metric may outperform another measure in a particular economicenvironment. For example, cash-focused measures, such as free-cash-flow, might perform betterduring economic downturns than accounting-focused measures like earnings. Or perhaps a moreasset-based measure, like book value, will outperform when the economy is moremanufacturing-based (‘70s and ‘80s), and struggle when the economy is more human capital andservices oriented (therefore making asset-based measures less relevant). To test thesehypotheses, we analyze the returns of the valuation metrics during economic expansions andcontractions. Our definitions for expanding or contracting economic periods are from the
National Bureau of Economic Research. 4 Results are shown in Exhibit 6.Exhibit 6 Panel A presents the returns for value strategies during economic expansions.B/M enjoys periods of relative out-performance in the early ‘70s, early ‘80s, and in late 2009.The B/M performance pattern lends weak evidence to the hypothesis that balance-sheet-basedvalue measures perform better than income or cash-flow statement value metrics when theeconomy generates more returns from tangible assets (e.g., property, plant, and equipment)relative to intangible assets (e.g., human capital, R&D, and brand equity). Overall, there is nostrong evidence that a particular valuation metrics systematically outperform all other metricsduring expanding economic periods.Exhibit 6 Panel B presents the returns for value strategies during economic contractions.Similar to the results in Panel A, the results in Panel B suggest there is no clear evidence that aparticular value strategy systematically outperforms all other strategies in contracting economicperiods. For example, during the July 1981 to November 1982 and March 2001 to November2001 contractions GP/TEV shows strong outperformance, but this same metric has the worstperformance in the December 2007 to June 2009 recession.Overall, there is little evidence that a particular value strategy outperforms all othermetrics during economic contractions and expansions. However, there is clear evidence thatvalue strategies as a whole do outperform passive benchmarks in good times and in bad. The oneexception to this rule is during the April 1975 to June 1981 business cycle, a time when a passivesmall-cap equity portfolio performed exceptionally well.4http://www.nber.org/cycles.html
Exhibit 6: Business Cycle Returns, 1971-2010This table reports compound annual growth rates during expansion and contraction periods in the US economy. Economic period definitions are from the National Bureauof Economic Research. This table reports return statistics for CRSP stocks with 8 years of data for all variables in the table. This sample excludes financials and utilities,and all firms below the NYSE 10% market capitalization cutoff. The sample is sorted into quintiles on June 30th of each year, and each portfolio is held for one year.Panel A reports the annual returns (equal and value-weighted) for the top quintile portfolio based on one of the following valuation measures: E/M, EBITDA/TEV,FCF/TEV, GP/TEV, and B/M. The best performing portfolio for a given time period is highlighted in bold.Equal-weight portfolioE/MValue-Weight TEVFCF/TEVGP/TEVB/MVWMktPanel A: ExpansionJuly 1971 - Oct. %-2.93%13.84%4.82%Apr. 1975 - Dec. 7%20.18%20.31%20.93%13.62%Aug. 1980 - June %20.93%17.35%23.49%17.69%Dec. 1982 - Jun. 6%19.26%23.84%19.12%15.86%Apr. 1991 - Feb. 6%18.88%19.77%15.97%14.41%Dec. 2001 - Nov. 9%13.49%12.05%7.75%8.48%Jul. 2009 - Dec. 8%19.91%31.77%38.52%28.71%Nov. 1973 - Mar. 83%-9.74%-6.15%-0.08%-14.82%Jan. 1980 - July 6%
promoted the concept of using “normalized earnings” in place of simple -year earnings one estimates. For example, Graham and Dodd (1934, p. 452speak to) the use of current earnings in the context of valuation metrics: “[earnings in P/E] should cover a period of not less than five years, and preferably seven to ten years.”
Automated Valuation Models (AVMs) are computer-based systems which encompass all data concerning real estate in a particular area and are capable of producing more consistent valuation reports within a short time. Traditional valuation methods employed by valuers somewhat delay the valuation process. For
Founded in 1807, John Wiley & Sons is the oldest independent publishing company in the . valuation and financial instrument analysis, as well as much more. . Introduction to Valuation 1 A Philosophical Basis for Valuation 1 Generalities about Valuation 2
John Wiley & Sons, Inc. C1.jpg. EQUITY ASSET VALUATION. . 1 Introduction to Free Cash Flows 108 2 FCFF and FCFE Valuation Approaches 109 . 11 Valuation Indicators and Investment Management 231 12 Summary 233 Problems 236. CHAPTER 5 Residual Income Valuation 243. Learning Outcomes 243
Wiley & Sons, 2003. Print. Fishman, Jay E., Shannon P. Pratt, and James R. Hitchner, PPC’s Guide to Business Valuations. Business Valuation Review. American Society of Appraisers. Business Valuation Update. Business Valuation Resources. A .pdf copy of the ASA’s Business Valuation Standards can be downloaded from the following
valuation services and terms for the 409a valuation report. Once this is signed and the invoice for the valuation services is settled, we can start running the report. Get your 409A valuation. Running the Report: 10-20 days After the data is provided an
2 Business Valuation Update February 2018 Business Valuation Resources Market Multiple adjustMents: Get a Grip On Grp Business Valuation Update (ISSN 2472-3657, print; ISSN 2472-3665, online) is published monthly by Business Valuation Resources, LLC, 111 SW Columbia Street, Suite 750, Portland, OR 97201-5814.
Jun 15, 2016 · The discussions and examples in this Valuation Advisory make specific assumptions for 52 illustrative purposes only. While general principles have been provided for guidance to assist in the 53 valuation of customer-related assets, assumptions used in the valuation of any asset
We will teach 4 valuation methods Trading Comparables Transaction Comparables Sum-of-the-Parts Valuation Discounted Cash Flow Analysis (DCF) 2. Why is Valuation important? . The SCIENCE is performing the valuation, the ART is interpreting the results in order to arrive at the "right"price. TECHNOLOGY can help you do this more efficiently.
