In-depth Value Assessment

Author: Aswath Damodaran (USA)
Publisher:
Publish Date: 2005-03-01
Features: "This is a very refreshing book! If the capital market needs to accurately assess the value of emerging companies, Damodaran's book will be crucial. His insights are highly enlightening, and his understanding of financial analysis is unparalleled. This book includes both new technology companies and traditional technology companies. Although their valuations differ, they share more similarities. Why choose technology companies? I believe that existing valuation books and models are mainly targeted at traditional manufacturing and service industry enterprises. Technology companies are entirely different. Their expansion primarily relies on research investments and mergers, rather than building factories or purchasing equipment. Many technology companies experience astonishing revenue growth rates, yet they have almost no current profits. Their assets are mainly patents, technology, and highly skilled employees. I attempt to analyze how to adjust concepts such as capital expenditures, operating income, and working capital to make them applicable to technology companies. This book covers the following topics: adjustment methods for discounting cash flows of technology companies, which often have limited historical records, have transitioned from business hybrids, and exhibit volatile stock prices; the limitations of traditional accounting standards in estimating cash flows for high-tech companies; better procedures for valuing future earnings, revenues, and cash flows; assessing the impact of stock options on stock value and revenue multiples for managers and employees; an in-depth evaluation of PEG and sell ratios."