VALUATION METHODOLOGIES

Formula, assumption, and usage notes for Datafin valuation models - Review Graham Number, Owner Earnings, NCAV, EPV, and RIM in one methodology library.

Graham Number Methodology

Graham Number

A conservative intrinsic value screen that combines earnings power and book value per share.

Formula

Graham Number = sqrt(22.5 x EPS x Book Value Per Share)

Open Methodology

Owner Earnings Methodology

Owner Earnings

A cash-owner view of value based on Warren Buffett's owner earnings concept.

Formula

Owner Earnings = Net Income + Depreciation and Amortization - Maintenance Capex

Open Methodology

NCAV Methodology

NCAV

A net-current-asset valuation used to identify deeply discounted balance sheets.

Formula

NCAV = Current Assets - Total Liabilities

Open Methodology

Earnings Power Value Methodology

EPV

A no-growth valuation that capitalizes normalized operating earnings.

Formula

EPV = Normalized After-tax EBIT / WACC

Open Methodology

Residual Income Model Methodology

RIM

A book-value anchored model that values income above the required return on equity.

Formula

Residual Income = Net Income - (Required Return x Beginning Book Value)

Open Methodology