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Risk = Danger + Opportunity!

CFO News Room

That expected devaluation in the high-inflation currency is not risk, though, since it can and should be incorporated into your forecasts. If a firm is badly managed, and you expect it to remain badly managed, you can and should build in that expectation into your forecasts of that company’s earnings and value.

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Data Update 4 for 2022: Risk = Danger + Opportunity!

Musings on Markets

That expected devaluation in the high-inflation currency is not risk, though, since it can and should be incorporated into your forecasts. If a firm is badly managed, and you expect it to remain badly managed, you can and should build in that expectation into your forecasts of that company's earnings and value.

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Data Update 6 for 2023: A Wake up call for the Indebted?

Musings on Markets

In fact, that may explain why firms that trade at low EV to EBITDA multiples are more likely to become targets in leveraged buyouts (LBOs) or leveraged recapitalizations. Business risk : Not surprisingly, for any given level of cash flows and marginal tax rate, riskier firms will be capable of carrying less debt than safer firms.