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Normalizing Earnings for a Troubled Firm
  • Normalizing Earnings for a Troubled Firm
  • Normalizing Earnings for a Troubled Firm
  • Normalizing Earnings for a Troubled Firm
  • Normalizing Earnings for a Troubled Firm
  • Normalizing Earnings for a Troubled Firm
  • Normalizing Earnings for a Troubled Firm
  • 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.

Prof. Aswath Damodaranby Prof. Aswath Damodaran
Professor at NYU Stern School of BusinessFollow 1,062
NYU Stern School of Businesswith NYU Stern School of Business
An Education in PossibleFollow 56
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financevaluationtroubled firmsearningsnormalize
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)

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Further information

Outputs:
- Normalized Earnings before interest and taxe


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