Corporate Finance

Essential metrics, capital allocation frameworks, and valuation models used to analyze financial performance, investment efficiency, and corporate value.

24 metrics

Return on Capital & Valuation

Analytical frameworks for evaluating investment profitability, asset efficiency, capital costs, and corporate valuation.

Metric		Description
Cost of Quality (CoQ)		Total financial expense incurred to maintain quality standards and handle product or service defects.
Modified Internal Rate of Return (MIRR)		Investment yield metric assuming positive cash flows are reinvested at the cost of capital.
Total Cost of Ownership (TCO)		Comprehensive accounting of all direct and indirect expenses incurred throughout an asset's useful life.
Basic Earning Power (BEP)		Measures asset operating earnings capacity before taxes and leverage considerations.
Break-Even Point		Minimum sales unit volume required to cover fixed and variable costs without net profit or loss.
Cost of Goods Sold (COGS)		Direct expenditures incurred in producing or acquiring inventory sold during an accounting period.
Depreciation Expense		Systematic allocation of a tangible asset's historical cost over its useful economic life.
DuPont Identity		Deconstructs Return on Equity into profit margin, asset efficiency, and financial leverage.
Internal Rate of Return (IRR)		Discount rate that yields a Net Present Value of zero for a series of project cash flows.
Net Income		Final residual income remaining after deducting all operating costs, interest, and taxes.
Net Present Value (NPV)		Sum of discounted future cash inflows minus initial capital investment costs.
Return on Assets (ROA)		Percentage indicator of operational efficiency in converting asset base into net profit.
Return on Marketing Investment (ROMI)		Financial return generated relative to capital allocated toward marketing campaigns.
Dividend Discount Model (DDM)		Equity valuation method pricing stock based on the present value of expected future dividends.
Internal Rate of Return on Assets (IRRA)		Yield metric evaluating rate of return generated specifically by physical asset cash flows.
Operating Return on Assets (OROA)		Efficiency metric assessing operating earnings capacity per unit of total company assets.

Profitability & Margins

Core operational margin metrics and valuation multiples evaluating top-to-bottom income efficiency.

Metric		Description
Enterprise Multiple (EV/EBITDA)		Valuation ratio comparing overall business value to core operational cash generation capacity.
Profitability Index (PI)		Ratio of future present value cash inflows to initial project capital investment cost.
Contribution Margin		Percentage of sales revenue remaining after variable costs to cover fixed operational overhead.
Gross Margin Return on Investment (GMROI)		Inventory productivity ratio measuring gross profit generated for each dollar invested in stock.
Gross Profit		Initial revenue balance remaining after deducting direct production and material costs.
Margin Multiple		Valuation metric relating enterprise value directly to gross profit capacity.
Operating Profit Margin		Percentage of revenue retained after fulfilling variable and fixed operational expenses.
Profit Margin		Final bottom-line margin indicating percentage of total revenue converted into net earnings.

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