FMP
Sep 30, 2022 1:14 AM - Jack Dalton
Learn Financial Modeling (5/5): Discounted Cash Flow statement (DCF) Methodology
5. Discover our Intrinsic Value and its meaning Enterprise value (EV) is a comprehensive measure of a company's total value that is frequently used in place of equity market capitalization because it includes debt. We could calculate enterprise value, which is the sum of stages one and two, but o...
Sep 30, 2022 1:13 AM - Jack Dalton
Learn Financial Modeling (4/5): Discounted Cash Flow statement (DCF) Methodology
4. Calculate the Weighted Average Cost of Capital Before we begin, I'd like to define WACC and discuss why we use it. The Weighted Average Cost of Capital (WACC) of a business measures its blended cost of capital. Capital Cost is the minimum rate of return required for a business to generate v...
Sep 30, 2022 1:10 AM - Jack Dalton
Learn Financial Modeling (3/5): Discounted Cash Flow statement (DCF) Methodology
3. Find our Terminal Value The terminal value (TV) of an asset, business, or project is the value of the asset, business, or project after the forecasted period when future cash flows can be estimated. Terminal value assumes that a company will continue to grow at a constant rate after the foreca...
Sep 30, 2022 1:08 AM - Jack Dalton
Learn Financial Modeling (2/5): Discounted Cash Flow statement (DCF) Methodology
2. Build A Cash Flow Statement The Discounted Cash Flow Analysis is a valuation methodology that measures the intrinsic value of a business. This is based on the present value of the company’s future free cash flow. You may have created a financial statement before that precedes the DCF analys...
Sep 30, 2022 1:07 AM - Jack Dalton
Learn Financial Modeling (1/5): Discounted Cash Flow statement (DCF) Methodology
1. What is a DCF model? A discounted cash flow model ("DCF model") is a type of financial model that estimates the value of a business by forecasting its future cash flows and discounting them to arrive at a current, present value. This is done by taking into account factors such as inflation,...
Sep 30, 2022 1:05 AM - Jack Dalton
What is Liquidity and Why is Liquidity Important?
The world of finance can feel like a black box. The industry is full of complicated sounding ratios and grandeur terms. However, once you understand the core principles, learn how to calculate the ratios, and how to use ratios it becomes a lot less complicated. In this article, we will cover: The de...
Sep 30, 2022 1:04 AM - Jack Dalton
Which ratios measure financial liquidity and how are these ratios calculated?
The finance world can often seem like an impenetrable black box, filled with complex ratios and lofty terminology. However, it becomes far more straightforward once you grasp the fundamental concepts, learn to compute the ratios, and understand how to apply them. In this article, we will go over eac...
Sep 30, 2022 1:03 AM - Jack Dalton
Profit and Profitability: Understanding the Differences and Their Importance
Profit is the foundation of any business, driving its operations and growth. But how do we measure profit effectively and compare it across companies? There are two approaches: absolute profit, calculated as total revenue minus total expenses, and profitability, which examines profit relative to rev...
Sep 30, 2022 1:01 AM - Jack Dalton
Which ratios measure profitability and how are they calculated?
In the last article we looked at the difference between profit and profitability. We learned that profitability is a measure of relative profit; how much profit is made compared to total revenue.In this article, we will explain the ratios that measure profitability, how to calculate them, and where ...
Sep 30, 2022 1:01 AM - Jack Dalton
What is Return on Equity, how do you calculate it, and why is it Important?
One of the most powerful ratios you can calculate is the profitability ratio Return On Equity (ROE). Its primary function is to tell you the expected return on investment for investors. However, using a few other analytical methods it can reveal far more information about how well the company is bei...
