Musings on Markets

JANUARY 10, 2025

Thus, as you peruse my historical data on implied equity risk premiums or PE ratios for the S&P 500 over time, you may be tempted to compute averages and use them in your investment strategies, or use my industry averages for debt ratios and pricing multiples as the target for every company in the peer group, but you should hold back.

Risk Premium 119

Risk Premium Dividends Start-ups Corporate Finance 119

Musings on Markets

JANUARY 5, 2024

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.

Dividends 106

Dividends Risk Premium Equity Book Value 106

Musings on Markets

FEBRUARY 15, 2023

One is to compute the taxes you would have paid on operating income, if it had been fully taxable, to get after-tax operating income and margin , and the other is to add back depreciation to operating income to get EBITDA and EBITDA margin.

Start-ups 52

Start-ups Equity Risk Premium Risk-free Rate 52

Musings on Markets

JANUARY 26, 2023

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

Start-ups 99

Start-ups Marketability Risk Premium Equity 99

Musings on Markets

JANUARY 28, 2024

In the last table, I look at the intrinsic risk measures, broken down by company age: Not surprisingly, there are more money losing young companies than older ones, and these young companies also have more volatile earnings.

Risk Premium 121

Risk Premium Beta Start-ups Equity 121

Musings on Markets

JULY 27, 2022

And no, you cannot add back stock based compensation and come up with an adjusted EBITDA to claim otherwise.) The effects of inflation show up first as higher risk free rates , across currencies, and next in higher risk premiums, with both equity risk premiums and default spreads rising.

Risk Premium 98

Risk Premium Start-ups Equity Marketability 98

Musings on Markets

MARCH 19, 2022

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.

Start-ups 100

Start-ups Risk Premium Equity Market Capitalization 100