Components of Capital Assets as Drivers of the Value of the Firm and the Value Added to Investor-Supplied Funds

Tom W. Miller ； Bernell K. Stone

《Advances in Investment Analysis and Portfolio Management》 2期 (2006/11) Pp. 85-121

https://doi.org/10.6291/AIAPM.2006.02.05

並列摘要

This paper analytically extends a valuation model for the firm to focus explicitly on the components of capital assets as drivers of the value of the firm and the value added to investor-supplied funds. The extended model provides information about the sensitivities of value-based metrics, the value of the firm, and the value added to investor-supplied funds to changes in the components of the firm's capital assets relative to sales revenue. These sensitivities are presented in terms of elasticities and dollar changes. Each elasticity shows the percentage changes in the internal cash flow return on investment, the market-based cash flow return on investment, the value of the firm, and the value-added to investor-supplied funds resulting from a percentage change in the efficiency measure for a component of capital assets. Each dollar amount shows the dollar changes in the value of the firm and the value-added to investors’ funds resulting from a percentage change in the efficiency measure for a component of capital assets. Sensitivities are provided for the components of both net working capital and net fixed assets. The sensitivities for the different components of capital assets show the impact of changes in associated efficiency measures on the value of the firm and the value added to investors' funds. This information is valuable in helping security analysts and managers evaluate value enhancement opportunities resulting from managing capital assets more efficiently.

並列關鍵字

valuation ； value added ； capital assets ； free cash flow ； economic profit

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