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Economic Profit Calculation

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Total Business Return (TBR)

Summary/Abstract


Short Description Total Business Return

 

Total Business Return is a forward-looking measure of CFROI.

TBR was designed to emulate the way capital markets determine TSR.

In this way one is able to 'use' TBR also for an internal business unit, division, project or strategy.

 

TBR is very similar to what EVA users call forward looking IRR.

 

TBR can be calculated at divisional (Strategic Business Unit) level and below and it can even be observed for privately held companies.


Formula


     Terminal Value End of Period

-    Gross Cash Investments Begin of Period

+   Gross Cash Flows in the In-between Period

----------------------------------------------------

     Total Business Return (TBR)


 

👀TIP: On this website you can find much more about calculating Total Business Return!


More valuation methodologies

 

 


Category


Financial Value

Market-Based

Expressed as a percentage

Economic Profit (indirect)



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