Normalizing Earnings for a Troubled Firm
Originally published: 12/07/2016 10:55
Publication number: ELQ-89878-1
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Normalizing Earnings for a Troubled Firm

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

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 (

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Further information

- Normalized Earnings before interest and taxe

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