Tracking Value with Accounts
The formula for value is:
Perpetuity value = CF / Discount rate
Accounts and Accounting
In order to track valuation performance of the perpetuity (i..e business), companies create accounts for each item of it’s financial existence. These accounts are the basis of valuation. Valuation is the basis of actions taken in a capitalist economy.
Accounts, Accounting & Excel
Excel is the software used to model the accounts of the enterprise and determine the valuation of the perpetuity (i.e. business).
Account Filings & Public Data
Account Statements: P&L
Income statement (P&L):
Account Statements: Balance Sheet
Assets = Liabilities + Shareholder’s Equity
Total Assets = Total Liabilities + Shareholder’s Equity
Current Assets + Long Term Assets = Current Liabilities + Long Term Liabilities + Value of Shares Previously Issued + Retained Earnings – Treasury Stock
Account Statements: Statement of Cash Flows
CF from Operating
CF from Investing
CF from Financing
Statement of Cash Flows is the linkage between the income statement and the balance sheet.
Get D&A from SCF (CF from Operations) and CAPEX from SCF (CF from Investing)