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Series 79 Function 1.2 part 2 Essential Financial Ratios and Valuation Metrics for Corporate Transactions
Description
a comprehensive outline of key financial metrics and ratios utilized in corporate advisory services, including mergers and acquisitions (M&As), restructurings, and equity or debt transactions. It categorizes these critical data points into five main areas:
Liquidity: Metrics that measure a company's cash flow and working capital, such as the current ratio, quick ratio (acid test), debt-to-capital, and the cash collection cycle.
Profitability: Indicators of a company's ability to generate earnings, including EBITDA, earnings per share (EPS), return on equity (ROE), return on assets (ROA), and various profit margins (gross, operating, and net).
Leverage: Ratios that evaluate a company's debt levels relative to its earnings, such as the interest coverage ratio and debt-to-EBITDA.
Valuation: Tools used to determine the value of a business or asset, including Enterprise Value (EV), Price-to-Earnings (P/E) multiples, Discounted Cash Flow (DCF), Weighted Average Cost of Capital (WACC), and the Dividend Discount Model (DDM).
Asset Turnover: Methods that evaluate how efficiently a company manages its assets, specifically noting inventory valuation methods like LIFO and FIFO.
📚 About the Podcast
Real-world finance explained the way exams and real life actually test it.
Ideal for the SIE, Series 7, Series 65/66, and anyone who wants to actually understand money—not just memorize buzzwords.
⚠️ Disclosure
This podcast is for educational purposes only and is not a recommendation to buy or sell any security. Opinions expressed are solely those of the host.
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