This is the first chapter of our book Principles of Cash Flow Valuation. It is an overview of what we present in the book. In this chapter, we present an informal introduction to the basic concepts and ideas in market-based cash flow valuation. The simplified exposition will provide sufficient...

Usually financial textbooks present the financial ratio analysis. Many courses are taught in financial analysis and teachers spend lot of efforts teaching how to calculate financial ratios. Most of them are used to analyze historical financial statements. These analyses are very useful in...

In theory, different valuation methods, with consistent assumptions, must give identical results. Numerical examples that purport to illustrate the theory should demonstrate the identical results. Unfortunately, in popular textbooks it is all too easy to find numerical examples that are at odds...

Taking a slightly closer look at the EVA basics prompts that the metric by design is a synthetic mixture of returns from the operating and financing activities, and therefore, yields a biased assessment of both the operating and overall performance. Fundamentally, the scale of the measurement...

We argue that the Economic Value Added (EVA) is biased by design and will generally yield distorted assessment of both the operating and overall performance. Fundamentally, the scale of measurement bias depends on the interest tax shield actually obtained in a measurement period and on a book to...

We demonstrate analytically and illustrate with examples that the conventional measures of the residual operating income such as the Economic Value Added (EVA) are biased by design and so may yield a misleading assessment of financial performance. Fundamentally, the magnitude of the measurement...

The English version of this article is available at: "http://ssrn.com/abstract=2214674" http://ssrn.com/abstract=2214674.En estas diapositivas se discute la dificultad práctica y conceptual de la búsqueda de una estructura óptima de capital EOC. Se propone un enfoque normativo que llamamos...

La versión española de este artículo se puede encontrar en: "http://ssrn.com/abstract=2214703" http://ssrn.com/abstract=2214703.In these slides we discuss the practical and conceptual difficulty of finding an Optimal Capital Structure. We propose a normative approach we call Implicit...

This article introduces a new financial metric for managerial performance evaluation, Value Added to Invested Capital (VAIC), with the cost of unlevered equity as a hurdle rate to calculate the capital charge rather than the widely accepted WACC. VAIC preserves all positive features of the...