This formula computes the current pre-tax return on equity of a business at cost.

The V-Formula Deconstructed

The V-Formula can be expanded to include numerous potential variables.

Relative V-Formula for Current Pre-Tax Return on Equity

The V-Formula can be viewed more basically as a series of relative numeric relationships.

Equity Valuation Multiple

This formula compares the current equity return your company can produce relative to the current rates of return other investors might find acceptable.

Equity Value

This formula calculates the estimated value of your company equity.

Equity Market Value Added (EMVA)

This formula determines the amount of EMVA your company has been able to create.

Sustainable Growth Rate

This formula determines how much the sales of your company can grow without needing new Equity or OPM Equity to help fund that growth.

Current Equity Rate of Return With Partial Ownership

This formula determines your personal current rate of equity return from your company at cost when you don't own all the equity.

Market Return on Equity

This formula determines your current rate of equity return from an investment made at a market price in a public or private company that is either above or below the actual original cost of the company as adjusted by EMVA.

Company Valuation

This formula illustrates how to value a company.

Compound EMVA Growth Formula

This formula, together with EMVA as a percentage of equity at cost, is a key measure of corporate value creation efficiency.