The terminal value (TV) is the present value of all future cash flows from a project or investment, discounted at the required rate of return. The required rate of return is the minimum return that a project or investment must provide in order to be accepted. The terminal value is used in discounted cash flow … Read more
. What is the Macro Environment in Economics? The macro environment in economics refers to the overall set of economic conditions that affect the business cycle and economic performance. It includes factors such as interest rates, inflation, unemployment, and economic growth. What are the 3 types of macroeconomics? 1. Classical macroeconomics: This approach focuses on … Read more
An economic moat is a competitive advantage that a company has over its rivals. This can take the form of a lower cost of production, a superior product, or a better distribution network. Having an economic moat gives a company a sustainable competitive advantage and makes it more difficult for competitors to gain market share. … Read more
PVA is a statistical technique used to help assess the potential value of a process improvement initiative. The analysis involves breaking down the initiative into its component parts, estimating the potential savings for each part, and then summing the savings to arrive at a total potential value. PVA can be used to assess the potential … Read more
Porter’s 5 Forces Explained Porter’s 5 Forces is a framework for analyzing the competitive forces shaping an industry. It is a tool used by businesses to identify opportunities and threats in the marketplace. The 5 forces are: 1. Threat of new entrants 2. Bargaining power of buyers 3. Bargaining power of suppliers 4. Threat of … Read more
ASP is a term used in business to describe the average price at which a particular product or service is sold. It is calculated by taking the total revenue from sales of a particular product or service and dividing it by the number of units sold. The average selling price can be a useful metric … Read more
What is a 10-K and What Does it Include? A 10-K is a type of financial report that publicly traded companies are required to file with the Securities and Exchange Commission (SEC). It provides detailed information about a company’s financial performance and position. The 10-K includes information such as a company’s income statement, balance sheet, … Read more
A price multiple is a valuation metric that is used to compare companies within the same sector. Price multiples can be used to value a company using either its market capitalization or its enterprise value. The most common price multiples are the price-to-earnings (P/E) ratio, the price-to-sales (P/S) ratio, and the price-to-book (P/B) ratio. The … Read more
What Is Market Value and Why Does It Matter to Investors? What does market value of securities mean? The market value of a security is the price that the security is currently trading at in the market. This price is determined by the supply and demand for the security in the market. The market value … Read more
The EBIT/EV multiple is a valuation metric used to compare the relative value of two companies. It is calculated by dividing a company’s earnings before interest and taxes (EBIT) by its enterprise value (EV). The enterprise value of a company is the sum of its market capitalization, debt, and preferred equity. The EBIT/EV multiple is … Read more
