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Below is a detailed listing of the MBA Boost contente-Book Table of ContentsAccounting
Business Law
Career
Case Analysis ToolsCase Work
EconomicsFinance
FormulaeInformation TechnologyLeadership
ManagementMarketing
Miscellaneous
Operations
Organizational Behavior
Reference
StatisticsStrategy/Frameworks
Listing and Description of Download Files[mouse over the to see a pop-up description of the file]Case Work
This is a spreadsheet that is designed to streamline and guide your MBA case analysis work. It has several worksheets, described as follows:
CASE ANALYSIS - A 1-page (printable) look at Porter's 5-Forces framework, the FIT framework, Value Chain analysis, marketing/product analysis matrixes, and the most useful questions to keep in mind FINANCIALS - a workbook that allows you to input financial information found in typical financial statements and automatically generate a variety of financial ratios BREAKEVEN - allows for a quick calculation of a product's breakeven NUMBER CRUNCHING - a quick look at the formulae used for a variety of financial ratios and statistics VALUATION - an overview of various methods that are used to value a company, group of assets, etc. Learning Tools
Here is a zipped collection of files that are the basis of the USC MBA-PM Math Review. The review is split into six modules described below. Each module contains a set of Powerpoint lecture notes, a set of problems and solutions in MS Word, and maybe some other materials.
~~~ Module 1: The Basics ~~~ Module 1 covers basic concepts like order of operations, changing units, and rules for exponents and radicals. It also covers material on linear functions, including slope, and systems of linear equations. ~~~ Module 2: Function Library ~~~ This module presents a catelogue of functions that every student should be familiar with. Functions covered include quadratic functions (parabolas), higher order polynomials, logarithmic and exponential functions, and the square root and inverse (1/x) functions. Also covered are concepts of function translation, reflection, and substitution. ~~~ Module 3: Calculus Review ~~~ Module 3 covers the basic rules and concepts of derivatives. Linear combination rule, product and quotient rules, and the chain rule are reviewed. This module emphasizes interpreting the derivative as a rate of change and the relationships between derivatives and optimization. ~~~ Module 4: Probability and Basic Finance Applications ~~~ Module 4 reviews the basic concepts of probability, including probabilities of events, basic rules for combining events (AND, OR, NOT), and conditional probability. Random variables are also introduced, along with the concepts of expected value, variance, and the normal distribution. The finance portion of this module reviews the time value of money, and uncertainty of investment portfolios. ~~~ Module 5: Economics and Operations Applications ~~~ Module 5 reviews marginal cost, average cost, elasticity, the Cobb-Douglas function, and illustrates material from Module 3 on isocost/isoquant graphs. On the operations side, we will focus on finding the bottleneck point in a production system, and on a problem in linear programming. Marketing
Class slides from introductory marketing course at UT Austin. Includes topics such as: quality, customer value, production vs. sales vs. marketing concept, marketing mix (4 Ps), value chain, relationship marketing, strategic marketing, segmentation, targeting and positioning.
Organizational Behavior
Here are the class slides for Professor Shung Jae Shin's Management 372 class (Organizational Behavior) at Texas A&M. This file summarizes the material from chapters 1-10 of the textbook Organizational Behavior by D. Hellriegel, J.W. Slocum, & R.W. Woodman (9th ed. Cincinnati, Ohio: South-Western Publishing 2000)
Contents: Ch. 1 - Introduction to Organizational Behavior ; Behavioral science and Human behavior Ch. 2 - Personality and Attitudes Ch. 3 - Perception and Attribution Ch. 4 - Learning Ch. 5 - Motivation I Ch. 6 - Motivation II Ch. 7 - Work stress Ch. 8 - Group Behavior Ch. 9 - Power and Political Behavior Ch. 10 - Conflict Management Here are the class slides for Professor Shung Jae Shin's Management 372 class (Organizational Behavior) at Texas A&M. This file summarizes the material from chapters 11-18 of the textbook Organizational Behavior by D. Hellriegel, J.W. Slocum, & R.W. Woodman (9th ed. Cincinnati, Ohio: South-Western Publishing 2000)
Contents: Ch. 11 - Leadership I Ch. 12 - Leadership II Ch. 13 - Interpersonal Communication Ch. 14 - Decision Making Ch. 15 - Job design Ch. 16 - Organizational Design Ch. 17, 18 - Organizational Culture/ Design Reference
Includes following worksheets:
WORLD MKTS - Year-End Closing Values for Various World Stock Markets WORLD MKTS 2 - Various World Stock Market Indices, converted into dollars, and adjusted to a single base for relevant comparison ADJ. WORDL MKTS - Inflation-Adjusted Stock Market World Indices (Base 12/31/89 = 100) NOM WORLD MKT RETURNS - Nominal Stock Market Returns by Decade (through 1996) US MKT - Stock Market Data Used in "Irrational Exuberance" by Robert J. Shiller S&P DIV YLDS - Standard and Poor's Composite Dividend Yields, 1871+ S&P PE RATIOS - Standard and Poor's Composite Price/Earnings Ratios WORLD CAP - Capitalization, Volume, Listed Companies and Index Change for the World's Stock Markets in 1996 WORLD CPI - World Consumer Price Inflation by Decade (though 1996) US CPI - U.S. Consumer Prices, 1820+ CPI-U - Consumer Price Index, 1963-2002 (based on CPI-U) UK CPI - U.K. Consumer Prices, 1820+ US WPI - U.S. Wholesale Prices, 1720-1996 XCHG RATE - Exchange Rates-Market - UK British Pound Daily (USD per GBP) and Japanese Yen (Yen per USD) XCHG RATE 2 - Dollar Exchange Rates by Decade GDP - U.S. Gross Domestic Product REAL GDP - U.S. Real Gross Domestic Product PER CAPITA GDP - Selected Per Capita Income and Product Items in Current and Real (1996) Dollars GDP BKDWN - A breakdown of the real U.S. Gross Domestic Product by category GNP - U.S. Gross National Product REAL GNP - U.S. Real Gross National Product FED FUNDS RATE - U.S. Federal Funds Rate PRIME RATE - U.S. Bank Prime Loan Rate PRIME RATE CHG - U.S. Bank Prime Loan Rates Changes -- Historic dates of changes and rates DISCOUNT RATE - Averages of daily Discount Rate figures, Rate for the Federal Reserve Bank of New York DISCOUNT RATE CHG - U.S. Discount Rate Changes -- Historic dates of changes and rates TREAS - U.S Treasury Constant Maturity Rate Yields 30 YR MORTGAGE - 30-Year Conventional U.S. Mortgage Rate MOODYS - Moody's Long-Term Corporate Yield Averages AAA YLD - U.S. AAA Corporate Bond Yields, 1857+ US BOND YLDS - U.S. Government Bond Yields, 1800-1995 GOLD - Gold Year End Closing Prices (per ounce) SILVER - Silver Year End Closing Prices (per ounce) Spreadsheets
Use this spreadsheet model to generate an amortization schedule for loans (useful for personal or business purposes).
In this section, you will find Black-Scholes models for valuing short term options, long term options and options that result in dilution of stock (such as warrants). In addition, you will find spreadsheets that convert Black-Scholes inputs into Binomial model inputs and use the binomial model to value options.
Spreadsheets included: • bstobin.xls - This spreadsheet converts the standard deviation input in the Black-Scholes model to up and down movements in the binomial tree. • optst.xls - This is a dividend-adjusted model for valuing short-term options. It considers the present value of expected dividends during the option life. • optlt.xls - This is a dividend-adjusted model for valuing long term options. It considers the expected dividend yield on the underlying asset. • warrant.xls - This is a model for valuing options that result in dilution of the underlying stock. Consequently, it is useful in valuing warrants and management options. If you are looking for one spreadsheet to help you in valuing a company, I would recommend one of these 'ginzu' spreadsheets. While they require a large number of inputs, they are flexible enough to allow you to value just about any company. You do have to decide whether you want to use a dividend, FCFE or FCFF model spreadsheet. If you have no idea which one will work for you, I would suggest that you try the "right model" spreadsheet first.
Spreadsheets included: • model.xls - This program provides a rough guide to which discounted cash flow model may be best suited to your firm. • higrowth.xls - This spreadsheet can be used to value tough-to-value firms, with negative earnings, high growth in revenues and few comparables. If you have a dot.com firm, this is your best choice. • divginzu.xls - A complete dividend discount model that can do stable growth, 2-stage or 3-stage valuation. This is your best choice if you are analyzing financial service firms. • fcfeginzu.xls - A complete FCFE valuation model that allows you to capital R&D and deal with options in the context of a valuation model. • fcffginzu.xls - This model tries to do it all, with all of the associated risks and rewards. I hate having to work with a dozen spreadsheets to value a firm, and I have tried to put them all into one spreadsheet - a ratings estimator, an earnings normalizer, an R&D converter, an operating lease converter, a bottom-up beta estimator and industry averages. Try it out and make your own additions. This excellent set of spreadsheets was created by Duncan Williamson for Biz/Ed (an excellent site). It contains MS Excel (usually version 97 or above) files that offer introductions to various business topics along with illustrations of how a spreadsheet can be used to work with those topics. Spreadsheets (modules) include:
1. Introduction to balance sheet and income statement (covers basics of financial accounting) 2. Markups and margins (discusses different ways to measure profit) 3. Gearing (looks at different forms of financing; gearing is the relationship between long-term capital and capital employed) 4. Depreciation (gives overview to concept and discusses different methods) 5. Cost analysis (looks at analyzing the costs of an organization) 6. Cost volume profit analysis (further develops cost analysis module and applies its principles in a variety of settings - includes break-even, margin of safety and profit volume) 7. Budgeting (master budget exercise looking at cash budget, income statement, and balance sheet) 8. Elasticity (looks at elasticities of demand, income, cross, advertising, and supply) 9. Profit maximisation (focused on economist's view of costs, revenue, and production opportunities but does offer some contrasts with accountant's view) Note: all 9 files are included in one zip file. This is a spreadsheet for computing the NPV of the project described in Brealey & Myers' Chapter 6. It can be used as a template for capital budgeting.
These spreadsheets are most useful if you are interested in conventional corporate financial analysis. It includes spreadsheets to analyze a project's cash flows and viability, a company's risk profile, its optimal capital structure and debt type, and whether it is paying out what it can afford to in dividends.
Spreadsheets included: • capbudg.xls - This program allows you to do a basic capital budgeting analysis for a project, and compute NPV, IRR and ROI. • risk.xls - This program allows you to use past returns on a stock and a market index to analyze its price performance (Jensen's Alpha), its sensitivity to market movements (Beta) and the proportion of its risk that can be attributed to the market. • levbeta.xls - This program allows you to enter the current beta, tax rate and the debt equity ratio for your stock, and obtain a table of betas at different debt ratios. • ratings.xls - This program allows you to estimate a rating and a cost of debt for your company from the firm's interest coverage ratio. • capstru.xls - This program allows you to estimate an "Optimal" Capital structure for a company using the cost of capital approach. • capstruo.xls - This is a variant that allows you to estimate an "Optimal" capital structure for a company whose operating income might vary with its debt rating - for instance, financial service firms. • macrodur.xls - This program allows you to estimate the duration of a firm's assets and its sensitivity to other macro economic variables. It may be useful in the design of debt. • dividends.xls - This program compares the dividends paid to what a firm could have paid, by estimating the free cash flow to equity (the cash flow left over after net debt payments, net capital expenditures and working capital investments. • dcfval.xls - This program computes the value of equity in a firm using a two-stage dividend discount and FCFE model. (For more extensive choices on valuation, look at the programs under the valuation section below.) When opening this spreadsheet, you will be asked if you want to re-establish links. Click "No" when this question appears (since you do not have the linked spreadsheet). This spreadsheet uses a simple example to illustrate the effect on portfolio risk of diversification and leverage. It also shows historical returns of Monsanto, Anheuser-Busch, and McDonnell-Douglas and the return of an equally weighted portfolio of the three stocks. Consistent with general theory, the average return of the portfolio is a weighted average of the average returns of the three stocks, but its risk is strictly less than a weighted average of the risks of the three stocks, due to the benefits of diversification. A graph also shows that a portfolio of all the stocks traded on the New York Stock Exchange has even lower risk. The contribution of a stock to the risk of a diversified portfolio is measured by its beta. The spreadsheet uses Anheuser-Busch returns to illustrate the concepts of market risk, idiosyncratic risk, and beta.
Economic Value Added is a registered trademark of the consulting firm Stern and Stewart. It is promoted as a means for measuring performance and awarding compensation. It ties in very well with capital budgeting: the NPV of a project is the present value of its EVA. However, even for positive NPV projects, EVA can be negative in some years. If capital were measured by its economic value rather than its book value (a difficult task!), then EVA would equal NPV when a project was taken and would be positive (negative) later only if outcomes were better (worse) than expected.
This spreadsheet shows to estimate the equity beta for a project using the betas of comparable companies and adjusting the for effect of leverage. The equity beta, market risk premium, and risk-free rate determine the cost of equity, according to the Capital Asset Pricing Model. The equity beta is combined with the after-tax cost of debt to compute the weighted average cost of capital.
Here is a detailed model to use as a point of departure for business plans or complicated case analysis.
If you have a clear choice in terms of models - stable growth dividend discount, 2-stage FCFE etc. - you can download a spreadsheet for the specific model in this section.
Spreadsheets included: • ddmst.xls - Stable growth, dividend discount model; best suited for firms growing at the same rate as the economy and paying residual cash as dividends. • ddm2st.xls - Two-stage DDM; best suited for firms paying residual cash in dividends while having moderate growth. • ddm3st.xls - Three-stage DDM; best suited for firms paying residual cash in dividends, while having high growth. • fcfest.xls - Stable growth, FCFE discount model; best suited for firms in stable leverage and growing at the same rate as the economy. • fcfe2st.xls - Two-stage FCFE discount model; best suited for firms with stable leverage and having moderate growth. • fcfe3st.xls - Three-stage FCFE discount model; best suited for firms with stable leverage and having high growth. • fcffst.xls - Stable growth FCFF discount model; best suited for firms growing at the same rate as the economy. • fcff2st.xls - Two-stage FCFF discount model; best suited for firms with shifting leverage and growing at a moderate rate. • fcff3st.xls - Three-stage FCFF discount model; best suited for firms with shifting leverage and high growth. • evavaln.xls - Three-stage FCFF valuation model, also presented in terms of projected EVA. • fcffgen.xls - A generalized FCFF model, where the operating margins are allowed to change each year; best suited for firms in transition. Given a set of assumptions about operations and financing, this spreadsheet generates income statements, balance sheets, and statements of cash flows. It is designed for a start-up company in that the initial balance sheet is blank, but it can be modified for a going concern by inputting the initial balance sheet. The spreadsheet is designed for bank notes payable to be the balancing variable -- using the Excel Solver (as explained in the spreadsheet) minimizes bank notes payable subject to maintaining a desired minimum cash balance.
The recommended method for capital budgeting is to discount free cash flows. In computing free cash flow, interest is not yet deducted in the income calculation. Free cash flow is cash flow available to make (after-tax) interest payments, repayments of principal, and payments to shareholders. This spreadsheet shows that the NPV of free cash flow (discounted at the weighted average cost of capital) equals the NPV of cash flows to lenders (after-tax interest plus repayment of principal less receipt of principal) discounted at the after-tax cost of debt plus the NPV of cash flows to shareholders discounted at the cost of equity. Usually, the NPV of cash flows to lenders is zero, so the NPV of cash flows to shareholders can be computed by discounting free cash flow. However, if the interest rate is below market, then the NPV of cash flows to lenders is negative. This has positive value for shareholders and should be added to the NPV of free cash flow.
This archive contains spreadsheet files created for Futures magazine, as detailed in Gibbons Burke's monthly column, The Computerized Trader. Includes the following files:
VAMI - A way of reporting fund performance whereby each reporting period is indexed at 100 or 1000 T-TEST - a macro-based sheet to calculate trade statistics (could be useful for regular statistics t-score work) SMA-EMA - Provides a derivation and associated charting of SPX with Simple and Exponential Moving Averages SHARPER - calculates a Sharper ration which is supposed to improve on the Sharpe ratio not by not penalizing profitable periods (while penalizing deep extended periods of drawdown more than shallow) RETURNS - simple sheet which calculates the total and annualized return based on starting and ending amounts and dates RETRACE - a Fibonacci Calculator which automatically calculates the correct retracement and projection numbers along with the current level of retracement OTPIMALF - Optimal F is a money management concept introduced by Ralph Vince. Vince says that for any given trading system trading a given market, there is some optimal fraction (f) of a trader's equity stake that should be put at risk which will produce the highest return after a series of trades. If a trader is not trading at this optimal f value, he/she is going to significantly reduce the trading results. These worksheets operate in tandem to calculate the optimal f value for a given trading track record. (Note: includes a readme file) INDEXER - Comparing Apples to Apples APRIL15 - Easing the sting of April 15th (Tax day trade) The real interest rate or cost of capital is the actual (nominal) rate adjusted for inflation. NPV's of projects can be computed by either discounting real (i.e., constant dollar) cash flows at the real cost of capital or by discounting the nominal cash flows at the nominal cost of capital. One gets the same answer either way.
One way to evaluate international projects is to estimate cash flows in the foreign currency, forecast exchange rates at which these cash flows can be converted to dollars, and then discount at the dollar cost of capital. A second way is to directly discount the foreign currency cash flows at an appropriate cost of capital for the foreign currency. Given forecasts of inflation rates, Relative Purchasing Power Parity implies a forecast of exchange rates. Also, given forecasts of inflation rates and a dollar cost of capital, the Fisher Hypothesis (that real rates of interest are equal) implies a cost of capital in the foreign currency. Relative Purchasing Power Parity and the Fisher Hypothesis are different assumptions but give the same dollar NPV.
This spreadsheet analyzes the lease/purchase decision. In the case of a purchase, it is assumed sales tax is paid on the negotiated price at the time of purchase, and property taxes are paid annually. In the case of a lease, it is assumed sales tax is paid on the difference between the list price and the payoff at the time of purchase, sales tax is paid on the payoff when the lease expires, and property taxes are paid by the lessor. This spreadsheet assumes the item is purchased at the payoff price at the time the lease expires. The lease has additional value to the lessee because of the option not to purchase. The features of your lease may be different than assumed here.
You can estimate equity as well as firm value multiples, based upon fundamentals.
Spreadsheets included: • eqmult.xls - This is a model that uses a two-stage dividend discount model to estimate the appropriate equity multiples for your firm. It will give you identical answers (in terms of value) as the 2-stage DDM model. • firmmult.xls - This model uses a 2-stage FCFF model to estimate the appropriate firm value multiples for your firm. It will give you identical answers (in terms of value) as the 2-stage FCFF model. This spreadsheet explains the NPV and IRR Rules for project selection. The NPV Rule is to take a project if its Net Present Value is positive. The IRR Rule is to take a project if its Internal Rate of Return is greater than the cost of capital. The IRR Rule should only be used for "standard" projects. The spreadsheet explains some pitfalls to avoid in using the IRR Rule.
This spreadsheet is Exhibit 1 in the Harvard Business School publication, "Note on the Theory of Optimal Capital Structure." It shows the effect of different capital structures on the stock price, expected return on equity, and other financial variables of a firm. This is the simplest possible example: the firm's EBIT is an independent random draw from the same distribution year after year, and investment exactly equals depreciation. In this situation, the market value of the firm can be computed by discounting Free Cash Flow at the Weighted Average Cost of Capital. "Optimal capital structure" means the capital structure that maximizes the stock price. This is the capital structure that maximizes the market value of the firm (debt plus equity) and the capital structure that minimizes the weighted average cost of capital. The key variables determining the optimal capital structure are the costs of debt and equity. These are simply assumed in the example.
This spreadsheet contains the Black-Scholes formula for the value of a European option on a non-dividend paying stock. It also illustrates the binomial foundation of the Black-Scholes model.
Tolerance for risk should affect the leverage an investor uses but not his choice of portfolio of risky assets (assuming the investor evaluates prospective portfolio returns on the basis of mean and variance alone). This spreadsheet illustrates this point considering portfolios of stocks and bonds. The means and variances of portfolios are estimated on the basis of historical returns, using the Ibbotson data. The "efficient" portfolio of stocks and bonds is invested 60% in stocks and 40% in bonds.
In this section, you will find three basic real option models - the option to delay, the option to expand and the option to abandon. In addition, the value of financial flexibility is considered as an option.
Spreadsheets included: • expand.xls - This model estimates the value of the option to expand in an investment project. Modified, it can also be used to assess the value of strategic options. • delay.xls - This model estimates the value of the option to delay an investment project. • flexval.xls - This model estimates the value of financial flexibility, i.e, the maintenance of excess debt capacity or back-up financing. • abandon.xls - This model estimates the value of the option to abandon a project or investment. In this section, you will find models to value both a patent (and a firm owning a patent) as an option, natural resource firms and equity in deeply troubled firms.
Spreadsheets included: • equity.xls - A model that uses option pricing to value the equity in a firm; best suited for highly levered firms in trouble. • natres.xls - A model that uses option pricing to value a natural resource company; useful for valuing oil or mining companies. • project.xls - A model that uses option pricing to value a product patent or option; useful for valuing the patents that a company might hold. A collection of spreadsheet models created by the SCORE Association to help entrepreneurs, especially with the business plan creation process. Spreadsheets include:
- Balance Sheet: a basic BS template - Projected Balance Sheet: a slightly different take on the other BS provided - 4 Year Profit Projection: basically a simple Income Statement projected out four years - Financial History and Ratios: a summary of key IS and BS line items with the calculation of some prominent financial ratios - Breakeven Analysis: a breakdown of typical costs items into fixed and variable expenses to determine a breakeven sales level - Twelve Month Sales Forecast: a model for forecasting products/services for the next 12 months - Twelve Month Cash Flow: a model for tracking cash flow for the next 12 months - Twelve Month Profit and Loss Projection: a model for tracking P&L for the next 12 months Much has been written about famed U.S. investor and Berkshire Hathaway CEO Warren Buffett's investment style and successes. Preeminent among these writings are the oft-cited Berkshire Hathaway shareholder letters, written by the "Oracle of Omaha" himself. These informative letters have been the basis for a multitude of books. But even with an abundance of available information on "how to invest like Warren Buffett," it is apparent that something is lacking—how does Buffett determine an acceptable price for companies of interest? This spreadsheet accompanied an article which provides an example of the process Buffett is reported to go though to determine the intrinsic value of a publicly traded company.
This spreadsheet introduces basic interest-rate concepts, including future values, present values, and amortization tables (including sheets covering a car loan and a mortage). The spreadsheet functions PV, NPV, PMT, and IRR are also illustrated.
This spread sheet calculates and graphs the expected return and standard deviation of a two asset portfolio.
You can value synergy in an acquisition and analyze a leveraged buyout.
Spreadsheets included: • lboval.xls - This program analyzes the value of equity and the firm in a leveraged buyout. • synergy.xls - This program estimates the value of synergy in a merger. This set of spreadsheets allow you to
• Estimate the right discount rate to use for your firm, starting with the risk premium in your cost of equity and concluding with the cost of capital for your firm. • Convert R&D and operating leases into capitalized assets • Estimate the right capital expenditures and diagnose the terminal value assumptions to see if they are reasonable. Spreadsheets included: • readme1s.xls - This file describes the programs in this section and provides some insights into their usage. • wacccalc.xls - This spreadsheet allows you to estimate the cost of capital for your firm. • cpxest.xls - This program summarizes the three approaches that can be used to estimate the net capital expenditures for a firm, when it reaches stable growth. • oplease.xls - This program converts operating lease expenses into financing expenses and restates operating income and debt outstanding. • R&DConv.xls - This program converts R& D expenses from operating to capital expenses, estimates a value for the research asset and restates operating income. • implprem.xls - This spreadsheet calculates the implied risk premium in a market. This can be used in discounted cashflow valuation to do market neutral valuation. In this section, you will find a model for valuing income-generating real estate.
Spreadsheets included: • reval.xls - This spreadsheet allows you to value an income-generating property as well as just the equity stake in the property. Valuation is all about exceptions, and these spreadsheets are designed to help value specific types of companies including:
Financial Service firms: While dividend discount models tend to be the weapon of choice for many, you will find an excess equity return model here. • eqexret.xls - Estimates the value of equity in a bank by discounting expected excess returns to equity investors over time and adding them to book value of equity. Troubled firms: You will find an earnings normalizer spreadsheet, a generic valuation model for valuing a firm as a going concern and a spreadsheet that allows you to estimate the probability that a troubled firm will not survive. • normearn.xls - Normalizes the earnings for a troubled firm, uising historical or industry averages. • distress.xls - Estimates the likelihood that a troubled firm will not survive, based upon bond ratings as well as bond prices. • fcffneg.xls - Generalized FCFF model that allows you to value negative earnings firms as going concerns. Private companies: You will find spreadsheets for adjusting discount rates and estimating illiquidity discounts for private companies. • pvtdiscrate.xls - Adjusts the discount rate (cost of equity) for a private firm to reflect the lack of diversification on the part of the owner (or potential buyer) • liqdisc.xls - Estimates the illiquidity discount that should be applied to a private firm as a function of the firm's size and financial health. Uses both restricted stock approach and bid-ask spread regression. Young and high-growth firms: You will find a revenue growth estimator as well as a generic valuation model for high growth firms in this section. • revgrowth.xls - Estimates compounded revenue growth rate for a firm, based upon market share and market size assumptions. • higrowth.xls - This spreadsheet can be used to value tough-to-value firms, with negative earnings, high growth in revenues and few comparables. If you have a young or start-up firm, this is your best choice. Andrew Metrick offers downloadable tools in the form of Excel spreadsheets that VCs and finance students can use for valuation calculations. Includes:
* Betas: includes estimates of industry betas for the U.S. market premium, and country betas for the global market premium. * VC Method: used to make investment recommendations using the standard and modified versions of the VC method. * DCF: contains examples of reality-check models for three companies, a sample investment function, and industry statistics for DCF inputs. * VCV: contains templates for the valuation of preferred stock structures. Refer to Appendix C for more information. * Bintree: contains a 60-step binomial tree and modular worksheets for underlying asset value and option value. In this section, you will find a spreadsheet that reconciles EVA and DCF valuation, a model for estimating CFROI and a DCF version of a value enhancement spreadsheet.
Spreadsheets included: • valenh.xls - This spreadsheet allows you to make a quick (and dirty) estimate of the effect of restructuring a firm in a discounted cashflow framework. • fcffeva.xls - This spreadsheet shows the equivalence of the DCF and EVA approaches to valuation. • cfroi.xls - This model uses a 2-stage FCFF model to estimate the appropriate firm value multiples for your firm. It will give you identical answers (in terms of value) as the 2-stage FCFF model. This spreadsheet shows how to estimate the enterprise value of a company by discounting free cash flow. One of the issues is to how to compute a terminal value at the end of the explicit forecast period. One approach is to assume a constant growth rate for cash flows after the explicit forecast period. The growth rate is driven by the Return on Incremental Investment and the Plowback Rate. The per-share value of the firm is computed from the enterprise value by adding marketable securities, subtracting debt, and dividing by the number of shares outstanding.
Statistics
This full-text statistics textbook from the StatSoft software company covers the basic concepts of statistics as well as more complex aspects. Along with a helpful glossary of terms, the book also contains an excellent collection of frequently asked questions. This is a .zip file so you can use it on your PC without being connected to the Internet. There is also an online version at:
http://www.statsoft.com/textbook/stathome.html Listing of Article Summaries IncludedArticle Summaries
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