Earnings Power Value is a zero-growth valuation technique popularised by Bruce Greenwald of Columbia University.
Earnings Power Value is a valuation technique popularised by Bruce Greenwald of Columbia University. EPV uses a basic equation, namely Sustainable Adjusted Earnings / Cost of Capital. As it does not factor in growth, it may undervalue certain stocks but is arguably better than DCF analysis which tend to rely on highly speculative assumptions about the future.
You can read more about the EPV methodology here.
|Cyclically Adjusted Margin:||* £8.00%|
|Cyclically Adjusted Operating Profit:||= £3.59m|
|Maintenance SG&A Adjustment:||+ £4.35m|
|No Growth Operating Profit:||= £7.94m|
|Special Charge Adjustment:||+ £0.000m|
|Fully Adjusted Operating Profit, post Special Charges Adjustment:||= £7.94m|
|Taxed Operating Profit (at 28% corporate tax rate):||= £5.72m|
|Economic Depreciation Adjustment:||+ £0.13m|
|Distributable Cashflow:||= £5.84m|
|Earnings Power Value (Value of Firm):||= £41.7m|
|Net Debt / Cash:||- £-11.1m|
|Earnings Power Value (Value of Equity):||= £52.8m|
|Implied Market Cap (Currency Adjusted)||= GBP52.8m|
|Implied Share Price:||p658.9|
|Premium/(Discount) to Current Share Price:||-51.4%|