WorksheetsEconomic Profit and Valuation Concepts
Total questions: 10
Worksheet time: 5mins
Which of the following is not a time period in a valuation model?
Planning Period
Historical Period
Budget Period
Terminal
TSRs are the best external measure of performance for the company as a whole
True
False
What does the final calculation to get to economic profit?
EBIT - WACC
WACC * Total Capital
EBIT - Capital Charge
NOPAT - Capital Charge
Which of the following is an example of non-tangible capital?
Patents
Machinery
Inventory
Buildings
A business generating positive cash flow must be creating value
True
False
Economic profit margins are consistent across industries
True
False
A governing objective should NOT be...
A single stand-alone goal
Easily quantifiable
Short-term focused
Closely linked between internal and external objectives
What characteristics should you NOT look for when choosing a peer set?
Similar financial profile
Similar geographic segments
Similar operating segments
Stated in Proxy / Annual reports
A company's valuation reflects the complete picture of its performance
True
False
Having a negative economic profit margin means a company is underperforming
True
False
