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Module 7: Valuation Using the Residual Enterprise Income Valuation Model Andrew DePalma February 19, 2014. ANF 1-Year Chart. Retail Fundamentals. Inventories. Margins. REI Model Overview. REI method can be algebraically derived from the free cash flow model
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Module 7: Valuation Using the Residual Enterprise Income Valuation Model Andrew DePalma February 19, 2014
REI Model Overview • REI method can be algebraically derived from the free cash flow model • Values generated from the REI model and the FCF model are the same • Equation = • Residual earnings in excess of the expected return on net enterprise assets