Normalizing Earnings for a Troubled Firm

This model values firms with operating income that is either positive or can be normalized to be positive.

by Prof. Aswath Damodaran
Professor at NYU Stern School of BusinessFollow 940

with NYU Stern School of Business
An Education in PossibleFollow 45

2 reviews225 views|Start the discussion!|Bookmark download for free

Description
The user must define the following inputs:
- Current EBIT
- Current Interest Expense
- Current Capital Spending
- Current Depreciation & Amort'n
- Tax Rate on Income
- Current Revenues
- Current Non-cash Working Capital
- Chg. Working Capital
- Book Value of Debt
- Book Value of Equity
- Current riskfree (long term government bond) rate

Note: this model is being shared with the authorization of Professor Aswath Damodaran from NYU Stern Business School (www.damodaran.com)

This Best Practice includes
1 Excel Model