BROWSE

Absolute Value

What is an 'Absolute Value'

An absolute value is a business valuation method that uses discounted cash flow analysis to determine a company's financial worth. The absolute value method differs from the relative value models that examine what a company is worth compared to its competitors. Absolute value models try to determine a company's intrinsic worth based on its projected cash flows.

Explaining 'Absolute Value'

In addition to looking at ratios such as price to earnings and price to book value, value investors like to calculate what an entire business is worth when they are considering whether to buy a particular stock. Discounted cash flow models are one way to determine this worth. They estimate a company's future free cash flows, then discount that value to the present to determine an absolute value for the company. By comparing what a company's share price should be given its absolute value to the price the stock is actually trading it, investors can determine if a stock is currently under or overvalued.


Further Reading


Financial development, investment, and economic growth
onlinelibrary.wiley.com [PDF]
… There- fore, to mitigate the potential negative ef- fects of finance on economic growth, the government must reform its institutional en- vironment first. So far, empirical studies of the effects of financial development on economic growth have produced mixed evidence …

Performance implications of strategic performance measurement in financial services firmsPerformance implications of strategic performance measurement in financial services firms
www.sciencedirect.com [PDF]
… There- fore, to mitigate the potential negative ef- fects of finance on economic growth, the government must reform its institutional en- vironment first. So far, empirical studies of the effects of financial development on economic growth have produced mixed evidence …

Correlations in economic time seriesCorrelations in economic time series
www.sciencedirect.com [PDF]
… There- fore, to mitigate the potential negative ef- fects of finance on economic growth, the government must reform its institutional en- vironment first. So far, empirical studies of the effects of financial development on economic growth have produced mixed evidence …

Audit‐firm tenure and the quality of financial reportsAudit‐firm tenure and the quality of financial reports
onlinelibrary.wiley.com [PDF]
… There- fore, to mitigate the potential negative ef- fects of finance on economic growth, the government must reform its institutional en- vironment first. So far, empirical studies of the effects of financial development on economic growth have produced mixed evidence …

Sources of contagion: is it finance or trade?Sources of contagion: is it finance or trade?
www.sciencedirect.com [PDF]
… There- fore, to mitigate the potential negative ef- fects of finance on economic growth, the government must reform its institutional en- vironment first. So far, empirical studies of the effects of financial development on economic growth have produced mixed evidence …

Do financing constraints matter for R&D?Do financing constraints matter for R&D?
www.sciencedirect.com [PDF]
… There- fore, to mitigate the potential negative ef- fects of finance on economic growth, the government must reform its institutional en- vironment first. So far, empirical studies of the effects of financial development on economic growth have produced mixed evidence …

Measuring the financial sophistication of householdsMeasuring the financial sophistication of households
pubs.aeaweb.org [PDF]
… There- fore, to mitigate the potential negative ef- fects of finance on economic growth, the government must reform its institutional en- vironment first. So far, empirical studies of the effects of financial development on economic growth have produced mixed evidence …

Opaque financial reports, R2, and crash riskOpaque financial reports, R2, and crash risk
www.sciencedirect.com [PDF]
… There- fore, to mitigate the potential negative ef- fects of finance on economic growth, the government must reform its institutional en- vironment first. So far, empirical studies of the effects of financial development on economic growth have produced mixed evidence …

Least absolute value regression: recent contributionsLeast absolute value regression: recent contributions
www.tandfonline.com [PDF]
… There- fore, to mitigate the potential negative ef- fects of finance on economic growth, the government must reform its institutional en- vironment first. So far, empirical studies of the effects of financial development on economic growth have produced mixed evidence …


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