Musings on Markets

FEBRUARY 10, 2021

What is a hurdle rate for a business? In this post, I will start by looking at the role that hurdle rates play in running a business, with the consequences of setting them too high or too low, and then look at the fundamentals that should cause hurdle rates to vary across companies. What is a hurdle rate?

Hurdle Rate 52

Hurdle Rate Currencies Investments Valuation 52

Musings on Markets

FEBRUARY 12, 2025

In this post, I will focus on how companies around the world, and in different sectors, performed on their end game of delivering profits, by first focusing on profitability differences across businesses, then converting profitability into returns, and comparing these returns to the hurdle rates that I talked about in my last data update post.

Hurdle Rate 72

Hurdle Rate Accounting Investments Economics 72

Musings on Markets

JANUARY 31, 2024

In my last three posts, I looked at the macro (equity risk premiums, default spreads, risk free rates) and micro (company risk measures) that feed into the expected returns we demand on investments, and argued that these expected returns become hurdle rates for businesses, in the form of costs of equity and capital.

Hurdle Rate 80

Hurdle Rate Profit and Loss Accounting Investments 80

Musings on Markets

JANUARY 5, 2024

I also have quirks in how I compute widely used statistics like accounting returns on capital or debt ratios, and I will stay with those quirks, no matter what the accounting rule writers say. will reflect the most recent quarterly accounting filing. Insider, CEO & Institutional holdings 2. Aggregate operating numbers 3.

Valuation 105

Valuation Financial Analysis Analyzing Data Profit and Loss 105

CFO News Room

JANUARY 7, 2023

I also report on pricing statistics, again broken down by industry grouping, with equity (PE, Price to Book, Price to Sales) and enterprise value (EV/EBIT, EV/EBITDA, EV/Sales, EV/Invested Capital) multiples. Thus, market capitalization, interest rates and risk premiums, the data is as of that date.

Marketing 130

Marketing Valuation Corporate Finance Financial Analysis 130

Musings on Markets

AUGUST 19, 2024

If you are concerned that you are going to be hit with a sales pitch for that book, far from it! With more mature companies, as investment opportunities become scarcer, at least relative to available capital, the focus not surprisingly shifts to financing mix, with a lower hurdle rate being the pay off.

Corporate Finance 119

Corporate Finance Valuation Investments Finance 119

Musings on Markets

FEBRUARY 15, 2023

Starting with gross margins, and computing the number for all non-financial service firms, we report the distribution of gross margins across publicly traded companies at the start of 2023, again based upon gross income and sales in the most recent twelve months: While the median gross margin across all publicly traded global firms is about 30%.,

Profit and Loss 52

Profit and Loss Investments Hurdle Rate Accounting 52