DCF Valuation:
Download
1 / 20

DCF Valuation: FCF and EVA Models - PowerPoint PPT Presentation


  • 219 Views
  • Uploaded on

DCF Valuation: FCF and EVA Models. James L. Grant, Ph.D. JLG Research [email protected] FCF and EVA Valuation. Free Cash Flow Formula Generating Cash Flow Estimates Valuation of Cash Flows Cost of Capital Variation EVA Valuation. EVA Valuation Model. Economic Profit Formula

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' DCF Valuation: FCF and EVA Models' - odell


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript

DCF Valuation:

FCF and EVA Models

James L. Grant, Ph.D.

JLG Research

[email protected]


Fcf and eva valuation

FCF and EVA Valuation

Free Cash Flow Formula

Generating Cash Flow Estimates

Valuation of Cash Flows

Cost of Capital Variation

EVA Valuation


EVA Valuation Model

Economic Profit Formula

Forecasting Economic Profit

NPV Valuation of EP

Cost of Capital Variation

Standard Accounting Adjustments


Standard eva accounting adjustments
Standard EVA Accounting Adjustments

  • Operating leases

  • LIFO Reserve

  • Research and Development

  • Goodwill Amortization

  • Special items (restructuring costs)

  • (typically cited in CFA program)


Jlg research disclosed versus basic eva dow jones industrials
JLG Research Disclosed versus Basic EVADow Jones Industrials


Illustration of multiple regression analysis

Illustration of Multiple Regression Analysis

Top 50 US Wealth Creators

(And Destroyers)


NPV/Cap=a + b times EVA/Cap

Decileb (slope)R-Squared

1 18.57 67.37%

5 11.72 39.74%

6 2.99 10.57%

10 0.46 7.47%

Source: J. Grant, Foundations of Economic Value Added



ad