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Drug Stores: Walmart PowerPoint Presentation
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Drug Stores: Walmart

Drug Stores: Walmart

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Drug Stores: Walmart

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Presentation Transcript

  1. Drug Stores: Walmart Eric Biro

  2. Residual Income Model • Using forecasted EPAT and NEA to value the firm (instead of forecasted cash flows) • CF projections not needed – accounting numbers only • Residual income is the amount of earnings in excess of that expected of a given NEA • Benefit: income shifting accounting choices have no effect on valuation

  3. Residual Income Valuation

  4. DCF Valuation

  5. Comparison