Remove 2020 Remove EBITDA Remove Risk Premium
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Anatomy of a Market Crisis: Tariffs, Markets and the Economy!

Musings on Markets

Staying with the safety theme, I looked at US companies, broken down by debt burden (measured as debt to EBITDA): On this dimension, the numbers actually push against the flight to safety hypothesis, since the companies with the least debt performed worse than those with the most debt.

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Data Update 1 for 2024: The data speaks, but what does it say?

Musings on Markets

Beta & Risk 1. Equity Risk Premiums 2. EBIT & EBITDA multiple s 5. Working capital needs Thus, I compute pricing multiples based on revenues (EV to Sales, Price to Sales), earnings (PE, PEG), book value (PBV, EV to Invested Capital) or cash flow proxies (EV to EBITDA). Return on Equity 1. Debt Details 1.

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Tesla in 2023: A Return to Reality, The Start of the End or Time to Buy?

Musings on Markets

Tesla's rise is summarized in the graph below, where we look at the company's revenues and earnings over time, with earnings measured in gross and operating terms, and EBITDA capturing operating cash flows: 2022 numbers updated to reflect 4th quarter earnings call on 1/25/23 Between 2010 and 2020, Tesla grew revenues from $117 million to $31.5

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Data Update 5 for 2024: Profitability - The End Game for Business?

Musings on Markets

In my last three posts, I looked at the macro (equity risk premiums, default spreads, risk free rates) and micro (company risk measures) that feed into the expected returns we demand on investments, and argued that these expected returns become hurdle rates for businesses, in the form of costs of equity and capital.

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Russia in Ukraine: Let Loose the Dogs of War!

Musings on Markets

The overriding message in all of this data is that Russia/Ukraine war has unleashed fears in the bond market, and once unleashed that fear has pushed up worries about default and default risk premia across the board.

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Data Update 6 for 2023: A Wake up call for the Indebted?

Musings on Markets

An Optimizing Tool In my second and third data posts for this year, I chronicled the effects of rising interest rates and risk premiums on costs of equity and capital. Debt to EBITDA, Interest Coverage Ratios If debt to capital is not a good measure for judging over or under leverage, what is?