The Value Equation Framework

Current Pre-Tax Return on Equity

This formula computes the current pre-tax return on equity of a business at cost.

The V-Formula Deconstructed

Schematic illustration of the V-Formula Deconstructed.

The V-Formula can be expanded to include numerous potential variables.

Relative V-Formula for Current Pre-Tax Return on Equity

The V-Formula can be viewed more basically as a series of relative numeric relationships.

Equity Valuation Multiple

This formula compares the current equity return your company can produce relative to the current rates of return other investors might find acceptable.

Equity Value

This formula calculates the estimated value of your company equity.

Equity Market Value Added (EMVA)

This formula determines the amount of EMVA your company has been able to create.

Sustainable Growth Rate

This formula determines ...

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