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Not surprisingly, the company listings are across the world, and I look at the breakdown of companies, by number and market cap, by geography: As you can see, the market cap of US companies at the start of 2025 accounted for roughly 49% of the market cap of global stocks, up from 44% at the start of 2024 and 42% at the start of 2023.
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). Long term Reinvestment (Cap Ex & Acquisitons) 4. Be patient.
In this post, I want to focus on that point, starting with a discussion of why stories matter to investors and traders and the story that propelled the company to a trillion-dollar marketcapitalization not that long ago. billion in revenues in 2021. billion.
A more tangible way to see why intangibles have become a hot topic of discussion is to look at the evolution of the top ten companies in the world, in marketcapitalization, over time: In 1980, IBM was the largest market cap company in the world, but eight of the top ten companies were oil or manufacturing companies.
For instance, if the marketcapitalization of Airbnb today is $60 billion, you would need it to deliver gross billings of $200 billion in 2031, with an operating margin of close to 35%. In fact, it is these differences that allow for buyers and sellers to co-exist in the market.
The table below summarizes the market cap change, by region of the world: It is no surprise that Eastern Europe and Russia, which are in the eye of the hurricane, have seen the most damage to equities, but other than the Middle East, every other equity market in the world is down, with the US, EU and China shedding significant marketcapitalization.
In fact, at a zero percent tax rate, the optimal debt ratio, if you define it as the mix that minimizes cost of capital is zero. Cash generating capacity : Debt payments are serviced with operating cash flows, and the more operating cash flows that firms generate, as a percent of their market value, the more that they can afford to borrow.
Given the historical roots of the biggest Indian family groups, the Adani Group has been a recent entrant, not making the top ten list (in terms of either operating metrics like revenues or market-based numbers like marketcapitalization or enterprise value) as recently as ten years ago, and barely making the top ten list five or six years ago.
For the market, it is often built on papers (or books) that look at the historical data on what equity markets have delivered as returns over long periods, relative to what you would have made investing elsewhere.
It is for this reason that I chose to compute returns differently, using the following constructs: I included all publicly traded stocks in each market, or at least those with a marketcapitalization available for them. I converted all of the marketcapitalizations into US dollars , just to make them comparable.
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