Category: Valuations

Company Valuation Introduction

See Also: Cost of Capital Capital Asset Pricing Model Common Stock Cash Flow After Tax Discount Rate Why Valuation Matters Valuation Methods Liquidation Valuation Company Valuation Introduction How do you value a company and its equity? How do you calculate a company’s fair value? Have you overvalued or undervalued your company? As we dive into

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Capitalization Rate

See Also: Capitalization Rate Example Capitalization Annual Percent Rate (APR) Wage Rate Currency Exchange Rates Capitalization Rate Definition The Capitalization Rate definition is a formula which represents the difference between annual net operating income and cost of capital. Its use in the business world serves the main purpose of valuation, including the following: Ventures Single

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Asset Market Value vs Asset Book Value

See Also: Accounting Income vs Economic Income Economic Value Added Value Drivers:Building Reliable Systems to Sustain Growth Basis Definition Variance Analysis Goodwill Impairment Asset Market Value versus Asset Book Value Book value and market value are two ways to value an asset. An asset’s book value can differ from its market value. Market value is the

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Arm’s Length Transaction

See Also: Accounting Principles Accounting Concepts Point of Sale (POS) Method Working Capital From Real Estate Which Bank to Choose? Arm’s Length Transaction Definition An arm’s length transaction or the arm’s length principle is a transaction that takes place between two completely unrelated parties. An arm’s length transaction also implies that the final transfer of

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Operating Leases Going Away?

The FASB (Financial Accounting Standards Board) and the IASB (International Accounting Standards Board) are recommending that the use of operating leases be scrapped. In addition, they are recommending that you treat all leases as capital leases. For over 40 years, FAS 13 has been the standard. But this step will change all that. Operating Leases

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What’s up, g?

You may recall from school (at least when you weren’t down at the bar nearest campus) that when valuing a company using a discounted cash flow technique, the value for g (earnings growth, that is) was quite significant in the company’s valuation. What’s up, g or growth? What creates the g or growth at your

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