The Value Equation: A Business Guide to Wealth Creation for Entrepreneurs, Leaders & Investors

ISBN-13: 9781119875642 / Angielski / Twarda / 2022 / 272 str.

Christopher H. Volk

Spis treści

Preface xiIntroduction 1Chapter 1: Free Enterprise and Wealth Creation 11In the Beginning Is the Idea 12Unicorn Likelihood 13Odds of Success 14The Six Variables 16Chapter 2: Daymond John and the First Variable 17Accountants vs. Entrepreneurs 21Variable #1: Business Investment 23Chapter 3: The Capital Stack and Two More Variables 25The Right Side 25Other People's Money (OPM) 26Variables #2 and #3: Amount and Cost of OPM 29Cost of Capital vs. Cost of Equity 30Capital Stack Assembly 31Equity Sourcing 33Chapter 4: Three More Variables and Voilà! 35Variable #4: Sales 36Variable #5: Operating Profit Margin 36Variable #6: Annual Maintenance Capital Expense 37Putting the Six Variables Together 39Gordon Growth Model 42Equity Valuation 43The Miracle of Compounding 44Dissecting Investment Returns 47Chapter 5: The Value Equation 51EVA and EMVA 52Making the V- Formula Even Simpler 54Solving for Other V- Formula Variables 56V- Formula Data Tables 58Chapter 6: Business Model Evaluation 61STORE Capital 62The FAANGs 66Chapter 7: Pulling the Corporate Efficiency Levers 75Operating Efficiency (O) 76Asset Efficiency (A) 80Capital Efficiency (C) 85Six- Shot Economics 88Chapter 8: Choosing from Your OPM Options 89Designing Your Own OPM 90Leasing 91Creating a Model to Evaluate OPM Options 93Real Estate as an Investment 98Chapter 9: Opportunity Cost 101Some Opportunity Cost Illustrations 102Creating a Model to Evaluate Real Estate Lease Opportunity Costs 104Chapter 10: The Final Form of OPM 115OPM Equity 116Sustainable Growth Rate 118Taking on OPM Equity 120Contents ixDeciding How Much OPM Equity to Use 121Creating a Five- Year Model 122Sweetening the Deal 125OPM Equity Flavors 127OPM Equity Considerations 129Chapter 11: A Look at Public Companies 131Determining Public Stock Equity Returns 137Walmart 143Chapter 12: Animal Spirits 149Elon Musk and Tesla 152Stock Exchange Differences 154Restaurant Case Studies 155Lone Star Steakhouse & Saloon 155Boston Chicken 158Value Investing 159Chapter 13: Mergers and Acquisitions 165OPM Capital Options 167Solving for Equity and Company Valuation 170EBITDA Valuation Multiples 172M&A Risks and Rewards 173M&A Nightmares 176GE and M&A- Driven Growth 179Focusing on What Matters 184Chapter 14: The Essential Ingredient 187The Growing Restaurant Illustration 187Designed Structural Change 189Planned vs. Imposed Structural Change 197Blockbuster Video 200Designed Revolutionary Change 203Reengineering the Corporation 205Chapter 15: The Art of the Possible 209The Circles of Business Life 212Evolving Capital Choices 216Value vs. Momentum Investing 219Defining a Financial Win 221Some Final Thoughts 225Glossary of Terms 227The Value Equation Framework 231Notes 237Acknowledgments 243About the Author 245Index 247

O autorze

Christopher H. VolkVeteran Executive, Entrepreneur, Business Leader & InvestorA recognized business model expert, Chris has introduced and led three successful public companies, two of which he co-founded. Those companies provided more than $20 billion in growth capital to thousands of businesses, helping them succeed. Chris resides with his wife in Arizona and Alabama.