Residual Income Model

Valuation

What is Residual Income Model?

A valuation approach that measures the value a company creates above its cost of equity. Calculates excess earnings relative to what shareholders require as a return.

Why Residual Income Model matters

StockFind uses this model for banks and lenders, where traditional DCF may be less applicable due to the nature of bank balance sheets.

Compare Residual Income Model

DCF vs Residual Income

Related terms in Valuation

DCF (Discounted Cash Flow)Intrinsic Value Market Capitalization P/B Ratio (Price-to-Book)P/E Ratio (Price-to-Earnings)P/S Ratio (Price-to-Sales)PEG Ratio Relative Valuation (Multiples)Terminal Value

Definitions are provided for educational and informational purposes only and are not investment advice. Consult a qualified financial advisor before making investment decisions.