title small bio t4 t9
t1 t5 t10
t3 t6 t11
t2 t8  

 

 

 

littlebookThe Little Book of Valuation

This web site is designed to support "The Little Book of Valuation". The publisher is John Wiley and Sons. Since it is one of four books that I have on valuation, it behooves me to explain how this book is different from my rest and I attempt to do so here. Once you have got that out of the way, you can get a quick review of the tools that make up the valuation toolkit and then move on to valuation inputs and mechanics. The next two sections look at adapting valuation models for different typies of companies - across the life cycle and then across sectors. The last section has a glossary and links to datasets and spreadsheets.

I apologize for errors that have found their way into the print edition. I have a list below of some of them. If you find more, I would like to add them to the list.
The Mea Culpa List: Errors and Corrections

The Tools
Topic Discussion Spreadsheet
Set up

Intrinsic versus Relative Value

 
The time value of money

Intuition behind the time value of money
Discounting mechanics

Present Value Calculator
Accounting 101 Asset value
Determing Debt and Equity
Measuring Earnings
Measuring Profitability
Financial Ratio Calculator
Statistics

Descriptive Statistiics
Measuring Relationships

 

Valuation Mechanices

Topic Details
Intrinsic Valuation Input Discussion Spreadsheets Datasets
Cash flows Estimating cashflows
  1. Growth estimator
  2. Cost of capital estimator
  3. Dividend discount model
  4. FCFE discount model
  5. FCFF discount model
  6. Top down model (changing margins and growth rates)
Margins by sector
Growth Rates Estimating Growth Historical growth rates by sector
Fundamental growth rates in equity earnings by sector
Fundamental growth rates in operating income by sector
Discount Rates

The cost of capital

Betas by sector
Implied Equity Risk Premiums over time
Country risk premiums
Cost of capital by sector
Terminal Value The Big Number  
Value Per Share Per Share Value  
Relative Valuation Multiples The Choices
  1. Equity Multiple Estimator
  2. Enterprise Value Multiple Estimator
PE ratios by sector
EV multiples by sector
Book Value multples by sector
Revenue multiples by sector
Comparables Finding comparables    
Control effects Controlling for differences   Market regressions: US and Global

Across the life cycle
Topic  Details
  Discussion Illustration Generic Spreadsheet Webcast
Young Growth Companies

Characteristics
Value Drivers

Evergreen Solar Valuing a young, growth company Webcast
Growth Companies

Characteristics
Value Drivers

Under Armour Valuing a growth company Webcast
Mature Companies

Characteristics
Value Drivers

Hormel Foods Valuing a mature company
Webcast
Declining & Distressed Companies

Characteristics
Value Drivers

Las Vegas Sands Valuing a declining company Webcast

Across Sectors
Topic  Details
  Discussion Illustration Generic Spreadsheet Webcast
Financial Service Characteristics
Value Drivers
Wells Fargo Valuing a bank Webcast

Commodity & Cyclical

Characteristics
Value Drivers

Toyota
Earnings Normalizer
Webcast
Intangible Assets Characteristics
Value Drivers
Amgen

Capitalizing intangible expenses
Adjusting equity value for options outstanding

Webcast

Add ons
Glossary
Updated data
Spreadsheets
Readings