Capitalization of Earnings Valuation Model

Values a business by capitalizing a normalized earnings figure at a rate you set. EBIT is pulled for the company along with return on capital and current market capitalization, so the capitalization rate can be checked against the returns the business actually earns rather than picked in isolation. Enter your own normalization adjustments and required return and the sheet produces an indicated value to compare directly against market capitalization. The method fits stable, cash generative companies better than cyclicals, where one earnings number is a poor proxy for the future.