Formula Flashcards
Net asset valuation
NCAs + CAs - CLs - NCLs (incl. pref shares)
Income based approach (PV of future cash flows)
Normal PV but
Value = earnings now x (1+g) / WACC - g
P/E valuation
P/E x PAT
Enterprise value/EBITDA
Value= multiplayer x EBITDA
Less MV of debt
Add short term investments
Dividend yield method
Value= dividend / yield %
Dividend valuation method
Value = d0(1+g) / (Ke-g)
SVA
S - sales growth L - life O - Operating profit margin W - working capital C - cost of capital A - asset T - tax rate
Do NPV using above but remember at the end to minus debt and add short term investments
Market efficiency
Weak - prices only change when there is new information. There are no changes in anticipation
Semi strong- prices reflect all information about past price movements and all knowledge that is publicly available. There is anticipation
Strong - share prices reflect all information including insider knowledge available to experts