{
  "docId": "019f6b8f-756e-76af-802b-17f806bd055d",
  "docSlug": "jarvis-valuation-multiples-primer",
  "documentTitle": "valuation multiples primer",
  "authorId": "valuation-multiples-primer",
  "authorName": null,
  "documentKindSlug": "deck",
  "documentKindLabel": "Deck",
  "sourceTypeSlug": "investor_relations",
  "sourceTypeLabel": "Investor relations",
  "presentationDate": null,
  "orientation": null,
  "aspectRatio": null,
  "pageNumber": 18,
  "pageCount": 47,
  "prevPage": 17,
  "nextPage": 19,
  "slideType": "other",
  "function": "establish_context",
  "density": "overcrowded",
  "nDataPoints": 0,
  "notes": "Technical primer on valuation theory from UBS Warburg.",
  "elementsJson": null,
  "metadataConfidence": 0.95,
  "imagePath": null,
  "slideHref": "/slides/019f6b8f-756e-76af-802b-17f806bd055d/18",
  "deckHref": "/decks/019f6b8f-756e-76af-802b-17f806bd055d",
  "deckJsonHref": "/decks/019f6b8f-756e-76af-802b-17f806bd055d.json",
  "deckAnchorHref": "/decks/019f6b8f-756e-76af-802b-17f806bd055d#slide-18",
  "components": [
    {
      "bbox": {
        "h": 0.1,
        "w": 0.6,
        "x": 0.33,
        "y": 0.32
      },
      "kind": "list",
      "text": "Growth due to reinvestment at the cost of capital; Growth due to reinvestment at a premium to the cost of capital; Growth due to inflation; Growth due to efficiency gains",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "2b8231ad-0476-4571-a671-647d70d6e956",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.3,
        "w": 0.6,
        "x": 0.33,
        "y": 0.45
      },
      "kind": "other",
      "text": "Valuation formulas for each growth scenario are provided in the text.",
      "attrs": null,
      "subkind": "unclassified",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "8b0e9463-2c26-4be7-836e-4e1604e03c79",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.6,
        "x": 0.33,
        "y": 0.75
      },
      "kind": "paragraph",
      "text": "Efficiency gains: Productivity gains not requiring additional investment, such as those resulting from cost control or higher market share, are a valuable source of growth.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "9180d5e9-e3f8-4626-ba68-4a55351065f2",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.06,
        "w": 0.6,
        "x": 0.33,
        "y": 0.42
      },
      "kind": "paragraph",
      "text": "Reinvestment at the cost of capital: Growth as a result of reinvestment at the cost of capital does not add value, and neither the share price nor the PE ratio is affected.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "a643e65e-950c-4df3-b788-9cc5c88a81b7",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.6,
        "x": 0.33,
        "y": 0.63
      },
      "kind": "paragraph",
      "text": "Inflationary growth: Growth resulting from a general increase in the price level results in a lower multiple because the replacement value of fixed assets and working capital rises.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "baf440b1-6144-493a-bcb1-59d154d0eb4b",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.6,
        "x": 0.33,
        "y": 0.22
      },
      "kind": "paragraph",
      "text": "If asked which value driver has the greatest impact on multiples, analysts and investors are likely to answer 'growth'. This is broadly true, but the impact of growth depends on its source and nature.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "c4100f37-5efb-4055-a66b-30e39ca22e4d",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.6,
        "x": 0.33,
        "y": 0.51
      },
      "kind": "paragraph",
      "text": "Reinvestment at a premium to the cost of capital: Growth as a result of reinvestment at an incremental return higher than the cost of capital will produce value-adding growth.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "e7b9582b-6e65-47ed-8830-bddee361ee56",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.03,
        "w": 0.4,
        "x": 0.33,
        "y": 0.19
      },
      "kind": "title",
      "text": "The Effect of Growth on Value",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "1b0bf0f2-6769-46b2-9134-9a275d3baa1f",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [
    {
      "name": "Logical chain",
      "slug": "logical-chain",
      "agent": null,
      "layer": "slide",
      "matchId": "64b58109-5ee5-4ef4-ad9d-e2ba0441b45e",
      "evidence": "list/bullet: Growth due to reinvestment at the cost of capital; Growth due to reinvestment at a premium to the cost of capital; Growth due to inflation; Growth due to efficiency gains",
      "confidence": 0.6
    }
  ],
  "frameworks": [],
  "arcBeats": [],
  "loops": [
    {
      "to": 20,
      "from": 18,
      "name": "Hypothesis Test",
      "slug": "42-hypothesis-test",
      "bestFor": "Strategy validation, due diligence, research presentations",
      "matchId": "68fe1396-f9e6-4f70-848f-ccd715745639",
      "evidence": "The document discusses the effect of growth on value",
      "position": 1,
      "objective": "How do growth and value affect multiples?",
      "structure": "The Hypothesis -> Test 1 (Supports/Refutes) -> Test 2 (Supports/Refutes) -> Conclusion (Validated/Pivoted)",
      "confidence": 0.6,
      "description": "State a hypothesis upfront, then systematically prove or disprove it with evidence"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}