[2.3] Financial Analysis Others

Question 1

How many models

Answer 1

1. Carvalho das Neves - binary model, decides if a company is healthy or not
2. Altman - not binary model, calculate how healthy a company is

Question 2

Multivariate Discrete Analysis

Answer 2

Use a number of variables in order to decide if a company is healthy, we should use a set of models to improve accuracy

Question 3

Economic Value Added (EVA)

Answer 3

Measures the shareholder value. A positive EVA means the creation of value. A negative EVA means the destruction of value.

[EBIT * (1-t)] - [funded rate * invested capital]

invested capital = Assets
funded rate = WACC
EBIT * (1-t) = NOPAT

Question 4

Weighted Average Cost of Capital (WACC)

Answer 4

E/V * Re + D/V * Rd * (1-t)

Question 5

EPS, DPS and payout ratio

Answer 5

EPS = Net Profit/Number Shares
Number Shares = Equity/Value 1 Share

DPS = Dividend/Number Shares

Payout Ratio = Dividend/Net Profit