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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Valuation Analysis

Definition:

What's it worth? Why? If you can answer those two questions, you can snatch the pebble from our hand.

Example

Let's pick a few systems which Wall Streeters use to "formally" value companies:

  1. Comparable multiple. That is, MyCompany.com trades at 27x this year's earnings; the S&P average is 16.5x earnings. But MyCompany.com is growing way faster than the "average" S&P company. But that S&P company pays a dividend. Yours doesn't. (Neener.) That's more or less how the conversation goes, anyway.
  2. This thing.
  3. Discounted Cash Flow Analysis.
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