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

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

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

Equidam

MAY 14, 2025

This calibration directly impacts expected returns, required ROI, survival rates, and appropriate liquidity discounts, significantly refining risk assessment. Country: Argentina Operating from Argentina influences extrinsic risk factors due to regional economic conditions, market size, regulatory environment, and currency stability.

Risk Premium 64

Risk Premium Risk-free Rate Beta Market Risk 64

Equidam

APRIL 22, 2025

4] , [3] , [5] Unlike mature, publicly listed companies which are easier to compare using multiples of current earnings (like EBITDA) [3] , startups must be valued based on their projected future; moats, margins and the perceived strength of their future growth trajectory. [3] 23] Risk-Free Rate: Tied to government bond yields (e.g.,

Discounted Cash Flow 64

Discounted Cash Flow Terminal Value Marketability EBITDA 64

Equidam

APRIL 22, 2025

2] Startups typically lack significant historical financial data, often operate with negative profits initially, rely heavily on private equity or venture capital rather than traditional bank loans, and face a much higher risk of failure. [1] This premium rises when perceived market risk increases. [27]

Discounted Cash Flow 52

Discounted Cash Flow Marketability Risk Premium Start-ups 52

Musings on Markets

FEBRUARY 6, 2025

I am no expert on exchange rates, but learning to deal with different currencies in valuation is a prerequisite to valuing companies. Two of the cheapest regions of the world to invest in are Latin America and Eastern Europe, but both carry significant risk with them, and the third, Japan, has an aging population and is a low-growth market.

Risk Premium 69

Risk Premium Start-ups Enterprise Value Equity 69