Musings on Markets

FEBRUARY 10, 2021

What is a hurdle rate for a business? In this post, I will start by looking at the role that hurdle rates play in running a business, with the consequences of setting them too high or too low, and then look at the fundamentals that should cause hurdle rates to vary across companies. What is a hurdle rate?

Hurdle Rate 52

Hurdle Rate Currencies Investments Valuation 52

Musings on Markets

FEBRUARY 12, 2025

In this post, I will focus on how companies around the world, and in different sectors, performed on their end game of delivering profits, by first focusing on profitability differences across businesses, then converting profitability into returns, and comparing these returns to the hurdle rates that I talked about in my last data update post.

Hurdle Rate 75

Hurdle Rate Accounting Investments Economics 75

CFO News Room

JANUARY 7, 2023

When valuing or analyzing a company, I find myself looking for and using macro data (risk premiums, default spreads, tax rates) and industry-level data on profitability, risk and leverage. The table below shows a subset of the data items that I have on my website, with the links to the US versions of the data sets, in html.

Marketing 130

Marketing Valuation Corporate Finance Financial Analysis 130

Musings on Markets

AUGUST 19, 2024

If you are concerned that you are going to be hit with a sales pitch for that book, far from it! With more mature companies, as investment opportunities become scarcer, at least relative to available capital, the focus not surprisingly shifts to financing mix, with a lower hurdle rate being the pay off.

Corporate Finance 123

Corporate Finance Valuation Investments Finance 123

Musings on Markets

JANUARY 6, 2023

When valuing or analyzing a company, I find myself looking for and using macro data (risk premiums, default spreads, tax rates) and industry-level data on profitability, risk and leverage. EV/Sales and Price/Sales 5. Per-employee Statistics Profitability Financial Leverage Reinvestment 1. Cost of Capital 3.

Valuation 52

Valuation Corporate Finance Financial Analysis Leverage 52

CFO News Room

NOVEMBER 8, 2022

You do the math and you’re like, “Okay, well, an advisor can handle about 100 clients, an associate advisor can help with some of those clients, you can leverage maybe an associate advisor with a couple of advisors, but there’s a capacity limit for each of the roles.” And then we have the 0% cap. Cean: Yep, yep.

Restructuring 130

Restructuring Planning Marketing Accounting 130

Barry Ritholtz

NOVEMBER 25, 2024

And so we, we get this contract written and I go off to grad school assuming I would go work at a big bank doing sales and trading in some quant role. So you’ve got, you’ve got a modeling hurdle rate that you need to figure out when you’re adding diversifiers. This is implicitly leverage.

Leverage 59

Leverage Investments Marketing Math 59