Posts by Andrew Stotz
Mistake #3: Growing Fixed Assets Slower than Revenue
Today, let’s talk about mistake #3: Growing fixed assets slower than revenue. First though, a quick recap of the full list of Top 9 Mistakes. The Top 9 Valuation Mistakes Overly optimistic revenue forecasts Underestimating expenses causing unrealistic profit forecasts Growing fixed assets slower than revenue Confusing growth with maintenance Capex Forecasting drastic changes in…
Read Full PostOne of the Biggest Influences on Your CFA Score: Personality
Becoming a CFA Charterholder is all about the three exams. And the required 48 months of work experience. And the 900+ hours of time in blood, sweat, and tears you’ll spend studying. But mostly, it’s the exams. All of these elements—and the exams—make the globally recognized CFA Program the highest standard of measurement for assessing…
Read Full PostMistake #2: Underestimating Expenses Causing Unrealistic Profit Forecasts
Welcome to the second installment of my Top 9 Valuation Mistakes blog series. In today’s post, we’ll examine Valuation Mistake #2: Underestimating expenses causing unrealistic profit. Let’s just quickly remind ourselves of the full nine valuation mistakes that analysts are in danger of making. The Top 9 Valuation Mistakes Overly optimistic revenue forecasts Underestimating expenses…
Read Full PostImprove Your CFA Exam Score
If you were to ask anybody who has ever taken the CFA exam, they would tell you one thing, it is hard. Since 1963, when the first exams began, on average only 42% of exam takers have passed Level 1, 46% for Level 2, and 57% when it comes to Level 3. However, this does…
Read Full PostOverly Optimistic Revenue Forecasts: The #1 Valuation Mistake (and How to Avoid It)
What Is the #1 Valuation Mistake? Overly optimistic revenue forecasts are the most common and damaging mistake in company valuation. Research on the 540 largest companies in Asia shows that analysts miss revenue forecasts by approximately 10% on average, with an estimated 15% optimistic bias. Since revenue is the foundation of every valuation model —…
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