Bartley J. Madden - CFROI
A Total System Approach to
Valuing the Firm
Madden is a partner at HOLT Value Associates LP, an international Value
Based Management consulting firm.
model applies dividend discount technique to
inflation-adjusted cash flow growth projections, using a firm-specific risk
premium plus the market-required rate of return to determine the firms
warranted value and the equity's warranted price. CFROI valuation
resolves two fundamental equity valuation issues: the recognized fallibility
of the Capital Asset Pricing Model and the inherent inconstancy of
accounting data. The former supplying a counter-intuitive cost of capital or
required rate of return; the other concealing the real prospects of the
firm's wealth creating efforts. As the lengthy flow charts detailing the
process required to turn accounting hash into economic reality attest,
CFROI valuation is not a black box of unexplained miracles. It's a
sweatshop equipped with empirically-proven, high tech tools which give the
driven amateur and dedicated professional the means to outrun the herd.
The purpose of this
comprehensive book is, according to the back flap, threefold:
1. to explain in
detail HOLT's CFROI valuation model,
2. to show the CFROI
model's unique benefits, and
3. to encourage more
productive thinking about issues involving the management of business firms
and shareholder value.
Madden succeeded in
achieving all three of these objectives, thus creating the ultimate book on
CFROI valuation available on the market today.
Highly recommended if
you want to dive deep into
CFROI valuation details and benefits.