Can somebody give me some suggestions on how to easily remember the MVA, EVA, Economic Profit, Economic Income, Accting Income and Claims valuation? They are all scrambling together at this point!
Accounting Income = Revenues - Expenses (based on Accounting Depreciation). Claims valuation - split up the claims between Equity/Debt Holders, value each claim individually, sum them up to arrive at Firm value. EP=NOPAT-$WACC [NOPAT= EBIT(1-T)] MVA=NPV of EPt @ WACC EIncome=AT Cash Flows - Economic Depreciation =AT Cash Flows -(Ending Value - Beginning Value) Eincome also = AT Cash Flows + Change in Market Value MVA=MV(Debt)+MV(Equity)
MVA=MV(Debt)+MV(Equity)- invested capital Claims valuation - split up the claims between Equity/Debt Holders, value each claim individually, sum them up to arrive at Firm value. ?