Musings on Markets

OCTOBER 6, 2023

A few days ago, I valued Instacart ahead of its initial public offering , and noted that the reception that the stock gets will be a good barometer of where risk capital stands in the market, right now. That would suggest that intangible assets are being valued and incorporated into balance sheets much more now than in the past.

Intangible Assets 129

Intangible Assets Book Value Equity Start-ups 129

Musings on Markets

FEBRUARY 27, 2022

In this post, I will look at corporate profitability, in all its different dimensions, and how companies across the globe, and across industries, measured up in the most recent years. To make comparisons, profits are scaled to common metrics, with revenues and book value of investment being the most common scalar.

Start-ups 99

Start-ups Equity Book Value Marketability 99

Musings on Markets

JANUARY 5, 2024

First, these categorizations were created close to twenty years ago, when I first started looking a global data, and many countries that were emerging markets then have developed into more mature markets now. Standard Deviation in Equity/Firm Value 2. Book Value Multiples 3. Fundamenal Growth in Operating Earnings 3.

Dividends 107

Dividends Risk Premium Equity Book Value 107

Musings on Markets

JULY 17, 2023

At the start of the year, the consensus of market experts was that this would be a difficult year for markets, given the macro worries about inflation and an impending recession, and adding in the fear of the Fed raising rates to this mix made bullishness a rare commodity on Wall Street. That pessimism was not restricted to market outlooks.

Marketability 98

Marketability Risk Premium Start-ups Treasury 98

Musings on Markets

JANUARY 31, 2024

In this post, I start by looking at the end game for businesses, and how that choice plays out in investment rules for these businesses, and then examine how much businesses generated in profits in 2023, scaled to both revenues and invested capital. The End Game in Business If you start a business, what is your end game?

Equity 83

Equity Book Value Start-ups Corporate Finance 83

ThomsonReuters

DECEMBER 7, 2023

And, since they are not able to expense an asset in one single period, depreciating the value of the asset over its useful life and charging it as an expense helps companies better match asset uses with the benefits it provides. It also helps with asset valuation, enabling clients to more accurately report an asset at its net book value.

Intangible Assets 98

Intangible Assets Book Value Start-ups Compliance 98

Equilest

FEBRUARY 24, 2024

Get started now for free and unlock the power of Equitest to make informed decisions about your business's financial future. Register here to start using Equitest today. Get started now for free and unlock the power of Equitest by registering here.

Business Valuation 40

Business Valuation Discounted Cash Flow Book Value Liquidation Value 40

IBG Business

DECEMBER 15, 2023

In case you have forgotten or are too young to know, the “E-Myth” (or “entrepreneurial myth”) is that most businesses are started by people with tangible business skills. If Dennis is absent for more than 10 days, things start to go wrong. That, Gerber argues, is simply not the case. Solutions in Print.

Start-ups 52

Start-ups Intangible Assets Book Value Marketability 52

Musings on Markets

JULY 22, 2021

Zomato, an Indian online food-delivery company, was opened up to public market investors on July 14, 2021, and its market debut is being watched for clues by a number of other online ventures in India, waiting in the wings to go public. The Zomato IPO clocks in at 420 pages , much of it designed to bore readers into submission.

Marketability 99

Marketability Start-ups Equity Price to Book 99

Brian DeChesare

JUNE 1, 2022

But over time, trends like market liberalization, deregulation, the shift to renewables, and the ESG religion “movement” have shaken up a sleepy sector. We’ll get into these fun developments, but I want to start with the basic definitions: Power & Utilities Investment Banking Defined.

Banking 98

Banking Equity Book Value Capital Structure 98

IBG Business

SEPTEMBER 11, 2024

Recasting Your Financials From the buyer’s point of view, your business’s market value is greatly influenced by their profit expectations under their ownership. Cleaning Up Your Financials While recasting your financials is a task we perform, “cleaning up” your financials is something that only you can do.

Start-ups 52

Start-ups EBITDA Equity Price to Earnings 52

Musings on Markets

NOVEMBER 10, 2022

In the figure below, I trace out where operating, capital and financing expenses show up in the three financial statements: Operating expenses become part of cost of good sold or other operating expenses (like SG&A and adverting costs) in an income statement, and are key inputs in determining operating income. billion.

Finance 97

Finance Start-ups Equity Equity Financing 97

Brian DeChesare

SEPTEMBER 13, 2023

The company still pays interest on the full $1000 and must repay it upon maturity, but you can buy the issuance at a steep discount because there’s a significant chance of default (see: book value vs. market value vs. face value ). A sharply declining stock price does not necessarily mean a company is “distressed.”

Equity 103

Equity Banking EBITDA Start-ups 103

Musings on Markets

JANUARY 6, 2023

In my last post, I talked about the ritual that I go through every year ahead of my teaching each spring, and in this one, I will start on the first of a series of posts that I make at the start of each year, where I look at data, both macro and company-level. That is not true!

Risk Premium 52

Risk Premium Dividends Start-ups EBITDA 52

Musings on Markets

OCTOBER 19, 2021

The second is that these disclosures have become less readable and more difficult to navigate, partly because they are so bulky, and partly because disclosures with big consequences are mingled with disclosure with small or even no consequences, often leaving it up to investors to determine which ones matter.

Start-ups 95

Start-ups Banking Marketability Technology 95

Musings on Markets

FEBRUARY 15, 2023

To set the stage, I will start by laying out the differences measure of earnings that reported on an income statement: At the top of the profit ladder is gross income , the earnings left over after a company has covered the direct cost of producing whatever it sells.

Start-ups 52

Start-ups Equity Risk Premium Risk-free Rate 52

ThomsonReuters

JUNE 15, 2021

Which basically means that before you do the transaction you have to have started the process that would enable you to do an audit of your internal controls for the year that you were in.”. You’re probably going to have to staff up. Some De-SPAC transactions reveal exorbitantly high figures allotted to goodwill, as much as 85 percent.

Risk-free Rate 64

Risk-free Rate Equity Start-ups Book Value 64

Reynolds Holding

APRIL 18, 2024

Over hree-year and five-year windows starting in 2005 and 2011], CEFO firms paid audit fees that were up to 16.3 cents lower per dollar of total book value of assets than such fees for non-CEFO firms. Our research also revealed that CEFO firms paid significantly lower audit fees than did non-CEFO firms.

Start-ups 49

Start-ups Book Value Compliance Finance 49

Reynolds Holding

FEBRUARY 12, 2024

According to researcher Giuliano Bologna at Compass Point Research and Trading , Inc: In the third quarter of 2023, only six us banks had non-mortgage consumer loans (personal, student, etc), measured at fair value, with SoFi’s loans making up more than 95% of the total. and its CET1 ratio would be cut from 14.3 percent to 8.9

Banking 45

Banking Book Value Start-ups Technology 45

Valutico

DECEMBER 15, 2022

Pharmacies are valued at 0.8x – 1.2x Wind farms are valued at €0.8m – €1.2m SaaS start-ups are valued at 10x Sales”. The ratio is either related to the Equity Value or ratios related to the Enterprise Value. . Price/Book : This multiple compares the price to the book value of a firm.

Precedent Transaction Analysis 52

Precedent Transaction Analysis Comparable Company Analysis EBITDA Enterprise Value 52

Valutico

DECEMBER 15, 2022

Pharmacies are valued at 0.8x – 1.2x Wind farms are valued at €0.8m – €1.2m SaaS start-ups are valued at 10x Sales”. The ratio is either related to the Equity Value or ratios related to the Enterprise Value. . Price/Book : This multiple compares the price to the book value of a firm.

Precedent Transaction Analysis 52

Precedent Transaction Analysis Comparable Company Analysis EBITDA Enterprise Value 52

Chris Mercer

AUGUST 1, 2022

This 2008 version had information on 477 restricted stock transactions, up from 430 transactions in the 2004 version. There were 231 transactions after April 1997, when the SEC’s period of restriction was reduced from two years to one year (up from 182 transactions in the 2004 version). Conclusion.

Dividends 52

Dividends Appraisal Marketability Start-ups 52

Valutico

MAY 6, 2024

Market-based methods like Comparable Companies Analysis and Precedent Transactions Analysis offer relative measures of value based on market data. Income-based methods such as Discounted Cash Flow analysis focus on future cash flows to determine value. For more insights, do have a look at our article on market multiple based valuation.

Discounted Cash Flow 52

Discounted Cash Flow Precedent Transaction Analysis Weighted Average Cost of Capital Comparable Company Analysis 52

Musings on Markets

JANUARY 9, 2021

The second was that, starting mid-year in 2020, equity markets and the real economy moved in different directions, with the former rising on the expectations a post-virus future, and the latter languishing, as most of the world continued to operate with significant constraints.

Risk Premium 52

Risk Premium Market Capitalization Equity Start-ups 52

FE International

DECEMBER 31, 2021

At FE International we value and broker the sale of internet businesses with a wide range of monetization strategies (e.g. up to >6x (more on that later) and seen more than a few interesting valuations devised by buyers! billion up to $6.8 At the time of writing, Facebook’s enterprise value is $527 billion.

Weighted Average Cost of Capital 52

Weighted Average Cost of Capital Business Valuation Precedent Transaction Analysis Start-ups 52

Musings on Markets

MAY 7, 2023

In this post, I will begin by looking at how to value banks and follow up with an examination of investor views of banking have changed, by looking at pricing, before examining divergences in how banks are priced in the market today. at the end of 2022 to 0.94 in May 2022.

Banking 86

Banking Price to Book Dividends Book Value 86

Musings on Markets

MARCH 8, 2023

Thus, the notion that a company that pays dividends is viewed as a failure strikes me as odd, since just farmers seed fields in order to harvest them, we start businesses because we plan to eventually collect cash flows from them. Viewed in that context, dividends as just as integral to a business, as the investing and financing decisions.

Dividends 102

Dividends Start-ups Corporate Finance Finance 102

Global Finance

JULY 29, 2024

One avenue for the banking sector is to start from scratch, as KakaoBank did in South Korea and Nubank in Brazil. Equity investors value Visa at 29 times earnings and 13 times book value, according to Bloomberg. Elsewhere, online-only “digital-attacker banks” are shaking up the landscape, Bain’s Breeden says.

Banking 104

Banking Start-ups Technology Marketability 104

Class VI Partner

JULY 28, 2021

Start with this exit checklist. Adjusted Net Book Value Adjusted Net Book Value is the Book Value of a business that has been adjusted to reflect the current market value of the assets and liabilities of a company. Exit Checklist. Want to get a sense for what it takes to sell your company?

Book Value 52

Book Value Equity Enterprise Value Fair Market Value 52

Musings on Markets

FEBRUARY 27, 2023

That may reflect the concern that once a person or entity starts borrowing to fund its needs, it is easy to overuse debt, and risk its wellbeing in the process. In that case, the optimal debt ratio for a company is the one that maximizes value, not necessarily the one at which the cost of capital is minimized.

Equity 52

Equity EBITDA Start-ups Net Debt 52

IBG Business

AUGUST 1, 2024

It’s not how much you sell the business for; it’s how much you end up with after tax. One of our key functions in preparing your business to go on the market is to recast its financial statements to show its true earnings and book value, in a way that buyers except. million per person to just $6.2 million (i.e., $5 Gray Dollars.

Start-ups 52

Start-ups Book Value Marketability 52

Sun Acquisitions

OCTOBER 5, 2022

It’s an excellent way to establish a business’ fair value as the valuation itself is conducted by an independent third party. Business valuation experts may look into the organization’s earnings multipliers, market cap, and book value in order to give an objective estimation of the company’s worth. Offer-to-Purchase Agreement.

Business Valuation 52

Business Valuation Earnings Multiplier Private Equity Firm Book Value 52

Musings on Markets

FEBRUARY 4, 2023

The Lead In As noted in the introductory paragraph, I start from a position of ignorance about the Adani Group, and it thus made sense to fill in that gap. First, they are infrastructure businesses , requiring large up-front investments and having long gestation periods, with regulatory and government oversight.

Start-ups 101

Start-ups Market Capitalization Marketability Equity 101

Musings on Markets

FEBRUARY 23, 2025

When the debt is within reasonable bounds (scaling up with the company), a company can borrow money, and not lower its ratings. We can start with dollar value debt, with two broad measures gross debt , representing all interest-bearing debt and lease debt, and net debt, which nets cash and marketable securities from gross debt.

Equity 78

Equity EBITDA Risk Premium Gross Debt 78

Musings on Markets

JANUARY 26, 2025

I follow up by looking at companies broken down by market capitalization, with an eye on whether the much-vaunted small cap premium has made a comeback. In effect, winning stocks continue to win, drawing in new funds and investors, but when these same stocks start losing, the same process plays out in reverse. in the last 20 years.

Price to Book 79

Price to Book Start-ups Book Value Marketability 79

Musings on Markets

FEBRUARY 6, 2025

The results, broken down broadly by geography are in the table below: As you can see, the aggregate market cap globally was up 12.17%, but much of that was the result of a strong US equity market. I am no expert on exchange rates, but learning to deal with different currencies in valuation is a prerequisite to valuing companies.

Risk Premium 69

Risk Premium Start-ups Enterprise Value Equity 69