Formula Flashcards

1
Q

Net asset valuation

A

NCAs + CAs - CLs - NCLs (incl. pref shares)

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2
Q

Income based approach (PV of future cash flows)

A

Normal PV but

Value = earnings now x (1+g) / WACC - g

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3
Q

P/E valuation

A

P/E x PAT

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4
Q

Enterprise value/EBITDA

A

Value= multiplayer x EBITDA

Less MV of debt
Add short term investments

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5
Q

Dividend yield method

A

Value= dividend / yield %

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6
Q

Dividend valuation method

A

Value = d0(1+g) / (Ke-g)

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7
Q

SVA

A
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

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8
Q

Market efficiency

A

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

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