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
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... RETURN ON ASSETS RETURN ON INVESTED CAPITAL P/E AS A VALUATION METRIC AND ... INVESTMENT KEY LEARNING POINTS IS CFROIA BETTER MEASURE OF PERFORMANCE ... INVESTMENT IEVER MADE QUANTIFYING THE MAGNITUDE AND.
... INVESTMENT IEVER MADE QUANTIFYING THE MAGNITUDE AND SUSTAINABILITY OF CAP ... INVESTMENT GROWTH IS A VALUE DRIVER APPLYING THE FUNDAMENTAL PRICING MODEL FINAL THOUGHTS FOR THE MOMENT CHAPTER ... RETURN, AND DIVERSIFICATION HOW LARGE IS.
... RETURN ON INVESTMENT THE LONG‐TERM REAL REQUIRED RATE OF RETURN MEASURING PERSISTENCE PUTTING IT ALL TOGETHER: DEVELOPING A MEAN‐REVERTING FORECAST MODEL CONCLUSION NOTES 10 FORECASTING GROWTH KEY LEARNING POINTS MEDIAN REAL.
... Return on asset calculation for Amazon in 2012 and 2013. EXHIBIT 2.7 Return on invested capital calculation for Amazon in 2012 and 2013. EXHIBIT 2.8 The P/E ratio for different combinations of constant growth and ROE assuming a 10% cost ...
... investment and efficiency growth. The former is only value additive when ... return calculation is based on its beginningof‐year asset base. EXHIBIT 3.2 ... investment in current dollars. EXHIBIT 3.8 Impact of inflation on the oldest ...
Contents
PURSUE | |
WHATS IT WORTH? VALUING THE FIRM | |
A REVIEW OF CONVENTIONAL VALUATION | |
MODEL | |
THE FLYING TRAPEZE OF PERFORMANCE | |
HOLT ECONOMIC PROFIT | |
GEOMETRIC AVERAGE? | |
THE COMPETITIVE LIFECYCLE | |
THE PERSISTENCE OF CORPORATE | |
FORECASTING GROWTH | |
RISK REWARD AND THE HOLT DISCOUNT | |
NOTES | |
CLOSING THOUGHTS | |