Beyond Earnings: Applying the HOLT CFROI and Economic Profit FrameworkBeyond Earnings is targeted at investors, financial professionals, and students who want to improve their ability to analyze financial statements, forecast cash flows, and ultimately value a company. The authors demonstrate that reported earnings are easily gamed by accounting shenanigans and reveal how commonly used profitability measures such as return on equity can be misleading. Because earnings and P/E ratios are too unreliable for valuation, this book takes you beyond earnings and shows you how to apply the HOLT CFROI and Economic Profit framework in a step-by-step manner. A better measure of profitability results in improved capital allocation decisions and fundamental valuations. This ground-breaking book offers the first practical in-depth discussion of how profitability and growth fade, and shows how to put this information to work right away. The authors introduce their trailblazing Fundamental Pricing Model which includes fade as an adjustable value driver and can be used to value the impact of business model disruption. As the authors explain, the key to superior stock picking is understanding the expectations embedded in a stock’s price and having a clear view of whether the company can beat those expectations. The HOLT framework has been rigorously field tested for over 40 years by global investment professionals to help them make better stock picks and by corporate managers to understand the expectations embedded in their stock price. Beyond Earnings is an indispensable guide for investors who want to improve their odds of outperforming the competition. |
From inside the book
Results 1-5 of 85
... shareholders.” Nigel Bolton, Chief Investment Officer Fundamental Active Equity, BlackRock “HOLT CFROI is a useful framework through which we can compare a stocks market valuation versus what the economic enterprises cash flow prospects ...
... shareholder capital." Emeritus Professor Brian Kantor, University of Cape Town; Chief Economist & Investment Strategist, Investec Wealth & Investment “Beyond Earnings introduces the concepts of Cash Flow Return on Investment (CFROI) and ...
... shareholder value? All fingers were pointed at Amazon, the biggest online retailer, which accounts for 5% of retail spending in the United States, and is presently the world's fifth most valuable company.” In 1994, Amazon was just a ...
... Shareholders: “When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we'll take the cash flows.” Treating Amazon's research and development (R&D) cost as a ...
... shareholders will reward the company by pushing its share price higher. The professional employer services firm Automatic Data Processing (ADP) makes this point clear. Since 1991, ADP has earned impressive operating margins that rank it ...
Contents
Discounted Cash Flow and Economic Profit Valuation | 111 |
Value Driver Forecasting | 255 |
Index | 363 |
EULA | 384 |