Sustainable Land Development Today - April 2008 - (Page 13) Let it rain, let it rain, let it rain… because low debt levels do not marginalize a company’s asset base. Third, in highly cyclical and competitive industries, such as E&C, earnings are commonly subject to a higher degree of variance than revenue. Accordingly, revenue growth is weighted heavier than earnings in the determination of value. Lastly, earnings figures rely heavily on accounting estimates, which can be manipulated to inflate or deflate earnings. As a consequence, analysts often view revenue as a more reliable measure of performance than earnings. Out of the three earnings measures analyzed by FMI, EBITDA consistently exhibited the highest degree of correlation with TEV. Such consistency suggests that the financial markets rely heavily upon EBITDA, contrasted with EBIT or net income, in determining the value of E&C companies. This finding agrees with EBITDA’s increased use as an indicator of profitability throughout the financial community. Most investment professionals consider EBITDA to be a cleaner measure of income generation since it is not subject to the vagaries of depreciation methodologies and nonoperating financial income and expense charges. Finally, FMI studied two different types of episodic events expected to influence the share prices of E&C companies. Specifically, FMI studied data on acquisitions and stock buybacks involving publicly traded E&C companies in order to determine the degree of impact that these activities have on a company’s share price. FMI studied only acquisitions with transaction values greater than $100 million that were made by publicly traded E&C companies between June 30, 1997, and June 30, 2007. Additionally, transactions were considered only if they represented more than two percent of an acquiring firm’s revenue base at the time of acquisition. In order to determine the relative effect of the acquisition, the acquiring firm’s share price was measured at different intervals before and after the transaction closing date. Changes in the acquiring firm’s share price were then contrasted against the average change in share price of the most comparable Have all aspects of your project precipitation-ready with coordinated software solutions from Carlson Software – • Carlson Natural Regrade • Carlson Civil • Carlson Hydrology STEP 1: Turn a disturbed or highly-erosive site* into a low-maintenance, erosion-stable landform with Carlson Natural Regrade, which enables you to naturally optimize lot view lines and sunlight *Natural Regrade exposures, and minimize is also perfect for undisturbed sites, material movement. Then lay enabling you to out your site plan on this valuedesign functional, added landform. beautiful open space plus storm water drainage and treatment areas. Use one, two or all three of these solutions. Full 3D road and site design – both commercial and residential – feed directly into flow calculations and drainage design. A Carlson Software first! And all Carlson users get FREE Carlson technical support – the hallmark of Carlson Software’s renowned customer service. For a complete list of features and contact information for the Carlson dealer ready to serve you, visit or call: STEP 2: Use Carlson Civil to design your 3D streets with intersections and cul-de-sacs. Continue with Carlson Civil for accurate, efficient site grading and pond/channel design with balanced cut and fill, minimizing material import and export costs. STEP 3: Then let Carlson Hydrology calculate Runoff Coefficients based on Layers for various road and site surfaces. Continue with Carlson Hydrology to Find Low Points, Locate Storm Inlets and Structures, and calculate precise flows to each inlet based on the Design DTM. www.carlsonsw.com 800-989-5028 ® Works Simply Simply Works Circle 130 • or www.SLDTonline.com/webcard www.SLDTonline.com 13 http://www.carlsonsw.com http://www.carlsonsw.com http://www.SLDTonline.com/webcard http://www.SLDTonline.com
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