Little book of valuation

Question 1

What are the three types of expenses in finance accounting

Answer 1

operating, financial, capital

Question 2

Is EBITA calculated bottom of top down from an Income statement?

Answer 2

bottom up (Earning before the deduction of Interest and Tax)

Question 3

How do you calcuate NOI

Answer 3

Revenues minus COGS

Question 4

how do you calculate margins?

Answer 4

profits to revenues

Question 5

how do you calculate operating margins?

Answer 5

operating income/sales

Question 6

After tax Return on Capital

Answer 6

operating income (1-tax rate)/BV of debt + BV of equity - Cash

Question 7

What is Return on equity

Answer 7

profitability relative to the BV of common equity

Question 8

How do you calculate ROE

Answer 8

NI/BV of Equity

Question 9

How would you describe a financial balance sheet

Answer 9

Assets in place + Growth assets = value of business minus - debt

Question 10

what is a Frequency distribution

Answer 10

not sure..

Question 11

what is a discounted cash flow

Answer 11

discounting future earning using a risk adjusted rate

Question 12

What are the two ways of valuing a company?

Answer 12

value of business minus debt or you can focus on earning potential.

Question 13

What is book value and how do you calculate it?

Answer 13

assets-liabilities