This page includes links to a number of corporate finance tools on this website. The mechanics of corporate models are described in a series of pages including A-Z modelling, featured models, and advanced modelling issues. Some of the innovations in corporate finance theory, corporate finance modelling and corporate finance data analysis are listed below. I have included links to the various components that discuss various completed models, exercises, theory and excel techniques.
Innovations in Corporate Finance Theory
Some of the innovations in Corporate Finance Theory on this website include:
- Solution to IRR problem of re-investment and ranking with Weighted Average IRR
- Computing Cost of Capital with Market to Book Regression Rather than CAPM
- Demonstration of Flaws in Value Driver Formula: V=Income x (1-g/ROI)/(COC-g)
- Correct Evaluation of WACC using Tax Shield from Interest Expense
- Use of Credit Spread to Derive Debt Beta and More Properly Derive Unlevered Beta
- Evaluation of Terminal Value Adjustments for Capital Expenditures, Working Capital and Deferred Tax that Depend on Growth
- Adjustments to Free Cash Flow and EV to Enterprise Value Bridge for Deferred Tax, Warranty Cost and Other Items
- Development of Terminal Valuation Techniques for Financial Institutions that Use Market to Book Ratio and ROE from Financial Models
- Evaluation of Political Risk Premiums from Computing Implied Probability of Default
Innovations in Corporate Modelling
You will also find a lot of innovations in corporate modelling. These include:
- Use of Historic Switch to Make Incorporation of New Financial Statements
- Evaluation of ROIC and Invested Capital Using Switches and SUMPRODUCT
- Development of INTERPOLATE Function to Evaluate Assumptions
- Automation of Scenario Analysis with Scenario Reporter
- Effective Automation of Historic Data Graphs with Flexible Spinner Box
- Resolution of Circular References Related to Interest Expense and Taxes
- Deprecation Techniques that Account for Changing Growth and Implied Retirements
- Development of Techniques to Automate Constant Capital Structure in Financial Models
- Dynamic Goal Seek Functions for Evaluation of Cost of Capital Using P/E Ratios
- User Defined Functions for Computing Stable Capital Expenditures to Depreciation and Other Items
Innovations in Corporate Data Analysis
- Creation of techniques to download stock price data, financial statement data and economic data
- Stock price database that allows you to evaluate IRR’s, volatility and beta for stocks, stock price indices, economic series and commodity prices.
- Financial Database that allows you to extract and evaluate financial data, financial ratios, and cost of capital across companies.
- Extraction of Data that Enables you to have Historic Basis for Creating Financial Models.
- Interest Rate, Exchange Rate and Commodity Price Databases that Include Historic Evaluation of Term Structures, Volatility and Other Statistics.
- Comprehensive Country by Country Database to Evaluate Growth and Risks Across the World.
Here is a model that starts with ROIC and applied to Amazon.