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 75
... Discount Rate 217 Key Learning Points 217 Risk, Return, and Diversification 218 What Is Risk? 221 How Do Corporate Managers Discount Cash Flows to Present Value? 223 How Should Investors Think about Risk When Discounting Cash Flows? 223 ...
... Discount Rate 231 Relating the HOLT Discount Rate and Framework to CAPM and APV 237 What Type of Discount Rate Is the HOLT Cost of Capital ? 238 Valuation Method Equivalence 239 Capital Cash Flows 243 Cost of Capital and Its ...
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Contents
Financial Performance Assessment | 3 |
Whats It Worth? Valuing the Firm | 4 |
The Flying Trapeze of Performance Metrics | 31 |
Accounting to Cash Flow Return on Investment | 57 |
Total Depreciating Assets | 81 |
Return on Invested Capital ROIC Cash Return on Gross Assets CROGA Cash Flow Return on Investment CFROI CFROI Adjustments Using Amazons ... | 88 |
Quantifying the Value and Risk of a Companys | 151 |
Fade Is a Value Driver | 169 |