Marginal Value Archives | Value Investing - Business and Economic Principles

Railroad Fund Balance 06/30/2020

Railways Pool / By David J Hoare MSA / 06/30/2020

49.060606 Shares of Norfolk Southern Corporation – Closes at $175.82/Share FMV = $8,625.84 (Avg Buy Price/Share = $203.83 for Basis of $10,000.00)
Cash Position including recent dividend payment from NSC = $1,555.16
Total Fund Balance = $10,181.00
FMV Gain as a % Since Inception: = 1.81%

Discounts – Various Meanings in Business

Terminology / By David J Hoare MSA / 01/03/2017

The term ‘discounts’ is a broad and varied meaning word when it comes to use in business. It literally has four distinct definitions. Each definition is used within a certain context of business. The first and most dollar expensive use is with original issue discount related to bonds in the market. The second use and most common is as an incentive in business.

Fair Market Value

Marginal Value / By David J Hoare MSA / 10/25/2015

Value at the individual level is strictly personal. But as more buyers for the same item come into play the price of the item begins to stabilize. If there are hundreds of thousands of buyers, the price reaches a high level of consistency or what is called ‘Fair Market Value’.

Value Investing – Absolute Dollars

Hotels, Investment Fund / By David J Hoare MSA / 09/09/2014

In the hospitality industry, there is one financial tenet that takes precedence over any other business perspective. In this industry, it is about putting the maximum number of dollars (ABSOLUTE DOLLARS) in the register after each day. One of the most misunderstood business dynamics of this industry is the higher than average fixed cost to run the company.

Definition of Contribution Margin

Phase II - Financial Analysis / By David J Hoare MSA / 04/06/2013

Contribution margin is a core business concept and is often used in cost accounting to identify the amount of financial contribution a sold product provides to the company. Simply put, contribution margin is the sales price less the direct costs (sometimes referred to as variable costs).

An Explanation of Goodwill – Part I – Generating Goodwill

Phase II - Financial Analysis / By David J Hoare MSA / 03/07/2013

The closest definition of Goodwill is devotion. Customers become devoted due to the way the small business treated them. It was worth paying a little more or going out of your way to go to the business that treated you well. How does a business generate goodwill? What is it worth?

Business and Industry Growth

Marginal Value / By David J Hoare MSA / 01/25/2013

The second most weighted factor in the risk multiplier series for the Discretionary Income Multiplier Formula is business and industry growth. This factor evaluates the overall change in an industry and in particular the business under review over the most recent three years.

Focus Groups – Adding Real Value to Your Business

Marginal Value / By David J Hoare MSA / 12/09/2012

I often wonder how a business could get better if it didn’t know what being the best meant. How could a small business entrepreneur determine he was indeed performing at or above the industry standard if there was no information available to say what was the best, average or poor? There isn’t any real performance standard, that is financial standards, for any particular small business operation.

Calculating the Value of a Business – Discretionary Income Multiplier Formula

Marginal Value / By David J Hoare MSA / 11/21/2012

In the world of small business, the sale of a business is dependent on two critical elements. They are DISCRETIONARY INCOME and the BUSINESS RISK MULTIPLIER. These two elements are multiplied to create the overall value of the business operation. In general, no small business operation is worth more than three times the discretionary income.

The Cost of One Putt

Marginal Value / By David J Hoare MSA / 11/21/2012

Using a large database, I calculated the average cost of one putt for each professional golfer. In business, this is known as the marginal cost of doing business.