by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
What is a Discounted Cash Flow?Discounted cash flow (DCF) is one of the most important methods used for evaluating the value of a company, project or asset based on future cash flows. It estimates the value of all future cash flows and then discounts them to find a...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
What is Earnings Before Interest Taxes Depreciation and Amortization?EBITDA is simply a acronym for the words Earnings before interest, tax, depreciation, and amortization. Simply put, is the measurement of company’s operating profitability. It excludes these...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
What is Equity Financing?Equity financing is the process to raise funds for a business by issuing shares (selling stock) in the market.How Does Equity Financing Work?When a company needs funds beyond what is available from operations, it generally has two options: 1)...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
What is the Discounted Future Cash Flow Method of Valuation? The Discounted Cash Flow (DCF) method uses the projected future cash flows of the business after subtracting the operating expenses, taxes, changes in working capital, and capital expenditures. This figure...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
What is the Excess Earnings Method of Valuation? Another earnings-based method is excess earnings. This method discounts company earnings based on two capitalization rates: a rate of return on tangible assets and a rate attributable to company goodwill. The method is...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
What is the Economic Value Added?Economic Value added is method of measuring the return on investment expected from the company above the relative cost of capital. How to Calculate the Economic Value Added?The equations is: Economic value added = Net operating profit...
