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The Value Equation: A Business Guide to Wealth Cre ation for Entrepreneurs, Leaders & Investors CH Volk

The Value Equation: A Business Guide to Wealth Cre ation for Entrepreneurs, Leaders & Investors By CH Volk

The Value Equation: A Business Guide to Wealth Cre ation for Entrepreneurs, Leaders & Investors by CH Volk


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The Value Equation: A Business Guide to Wealth Cre ation for Entrepreneurs, Leaders & Investors Summary

The Value Equation: A Business Guide to Wealth Cre ation for Entrepreneurs, Leaders & Investors by CH Volk

Discover one of the surest means to create personal wealth by building a profitable business

Every now and then, a business book comes along that offers original insights and a fresh perspective. In The Value Equation: A Business Guide to Creating Wealth for Entrepreneurs and Investors, veteran executive, entrepreneur, and investor Chris Volk delivers an engaging, straightforward explanation about how businesses work and provide wealth for entrepreneurs and investors. The author's signature approach is centered on his award-winning wealth creation formula in a book designed to simplify complex subjects with math no more complicated than what you learned in middle school.

Readers will become acquainted with the characteristics of successful business models, together with insights into how leaders can improve their own models in ways that generate personal and collective wealth. The author's framework presented in The Value Equation is the foundation upon which most of the largest personal fortunes were built.

Chris Volk also provides supplemental materials including interactive Excel spreadsheets, illustrations, and sample corporate financial models on a companion website. There is even a link to an award-winning video series created by Volk that served as his inspiration for the book. Full of illustrative case studies that highlight crucial business and finance concepts The Value Equation includes:

  • Explorations of the true value of using OPM (Other People's Money) and capital stack variations to build and grow your company.
  • Advice on business assembly, growth, mergers, acquisitions, and corporate reengineering, including discussions of valuation multiples, common risks, and capital options.
  • Guidance on how to valuate business models, delivered with help from a variety of stories and case studies. Uniquely, the author also draws on his own background, including the introduction of three successful companies to the public markets, two of which he was instrumental in founding.

The Value Equation is an indispensable addition to the libraries of anyone interested in growing wealth and capital through business, whether as a business leader, entrepreneur or investor.

About CH Volk

Christopher H. Volk

Veteran Executive, Entrepreneur, Business Leader & Investor

A recognized business model expert, Chris has introduced and led three successful public companies, two of which he co-founded. Those companies provided more than $20 billion in growth capital to thousands of businesses, helping them succeed. Chris resides with his wife in Arizona and Alabama.

Table of Contents

Preface 1

Introduction 3

1. Capitalism and Wealth Creation 10

In the Beginning Is the Idea 10

Unicorn Likelihood 11

Odds of Success 12

The Six Variables 14

2. Daymond John and the First Variable 15

Accountants vs Entrepreneurs 19

Variable #1: Business Investment 20

3. The Capital Stack and Two More Variables 21

The Right Side 21

Other People's Money (OPM) 22

Variable #2: Amount of OPM 24

Variable #3: Cost of OPM 25

4. Three More Variables and Voila! 29

Variable #4: Sales 29

Variable #5: Operating Profit Margin 30

Variable #6: Annual Maintenance Capital Expense 31

Putting the Six Variables Together 32

Gordon Growth Model 34

Equity Valuation 36

The Miracle of Compounding 37

Dissecting Investment Returns 38

5. The V-Formula 42

EVA and EMVA 42

Making the V-Formula Even Simpler 44

Solving for Other V-Formula Variables 46

V-Formula Data Tables 48

6. Business Model Evaluation 50

STORE Capital 50

The FAANGs 55

7. Pulling Corporate Financial Levers 62

Operating Efficiency (O) 63

Sales 63

Operating Profit Margin 64

Asset Efficiency (A) 66

Business Investment 66

Maintenance CapEx 69

Capital Efficiency (C) 71

% of OPM x Cost of OPM 71

Six-Shot Economics 73

8. Choosing from Your OPM Options 75

Designing Your Own OPM 75

Leasing 77

Creating A Model to Evaluate OPM Options 78

Real Estate as an Investment 82

9. Opportunity Cost 85

Some Opportunity Cost Illustrations 86

Creating A Model to Evaluate Real Estate Lease Opportunity Costs 87

10. The Final Form of OPM 98

OPM Equity 99

Sustainable Growth Rate 100

Taking on Modest OPM Equity 102

Deciding How Much OPM Equity to Use 103

Creating a Five-Year Model 105

Sweetening the Deal 107

OPM Equity Flavors 108

OPM Equity Considerations 110

11. A Look at Public Companies 112

Determining Public Stock Equity Returns 117

Walmart 122

12. Animal Spirits 126

Elon Musk and Tesla 128

Stock Exchange Differences 129

Restaurant Case Studies 130

Lone Star Steakhouse & Saloon 131

Boston Chicken 132

Value Investing 134

13. Mergers and Acquisitions 138

OPM Capital Options 139

Solving for Equity and Company Valuation 142

EBITDA Valuation Multiples 144

M&A Risks and Rewards 145

M&A Nightmares 147

GE and M&A-Driven Growth 149

Focusing on What Matters 153

14. The Essential Ingredient 156

The Growing Restaurant Illustration 156

Designed Structural Change 157

Technology-Enabled Changes 158

Core Competency Refinement 160

Keeping It Simple 163

Planned vs. Imposed Structural Change 165

Blockbuster Video 167

Designed Revolutionary Change 169

Reengineering the Corporation 171

15. The Art of the Possible 173

The Circles of Business Life 175

Evolving Capital Choices 178

Value vs Momentum Investing 181

Defining a Financial Win 182

Some Final Thoughts 186

Glossary of Terms 188

The V-Formula Framework 190

Current Pre-Tax Return on Equity 190

The V-Formula Deconstructed 190

Relative V-Formula for Current Pre-Tax Return on Equity 191

Equity Valuation Multiple 191

Equity Value 191

Equity Market Value Added (EMVA) 192

Sustainable Growth Rate 192

Your Current Equity Rate of Return Without Whole Company Ownership 192

Market Return on Equity 193

Company Valuation 193

Compound EMVA Growth Formula 193

Footnotes 194

About the Author 196

Additional information

NGR9781119875642
9781119875642
1119875641
The Value Equation: A Business Guide to Wealth Cre ation for Entrepreneurs, Leaders & Investors by CH Volk
New
Hardback
John Wiley & Sons Inc
2022-07-04
272
N/A
Book picture is for illustrative purposes only, actual binding, cover or edition may vary.
This is a new book - be the first to read this copy. With untouched pages and a perfect binding, your brand new copy is ready to be opened for the first time

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