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Drug Stores: Walmart
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Drug Stores: Walmart. Eric Biro. 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
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Drug Stores: Walmart
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Drug Stores: Walmart Eric Biro
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