{"id":2302,"date":"2010-12-21T15:48:45","date_gmt":"2010-12-21T20:48:45","guid":{"rendered":"http:\/\/www.credittrends.com\/blog\/?p=2302"},"modified":"2026-02-26T14:06:09","modified_gmt":"2026-02-26T19:06:09","slug":"protected-posts-open-to-buyers-of-security-valuation-and-risk-analysis","status":"publish","type":"post","link":"https:\/\/www.credittrends.com\/blog\/2010\/12\/21\/protected-posts-open-to-buyers-of-security-valuation-and-risk-analysis\/","title":{"rendered":"About Credit Trends"},"content":{"rendered":"
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Credit Trends was established to manage financial portfolios based upon:<\/p>\n

1- Free Cash Flow<\/strong>-Represents the maximum amount of cash an entity can distribute to holders of various financial instruments from its operations. This calculation requires a rigorous analysis of discretionary expenditures, patent maintenance, and transportation costs, alongside the structural impacts of unions and patterns of over- or underspending. To reach an accurate valuation, one must account for customer and supplier dynamics, potential classification errors within the Statement of Cash Flows, and the influence of grants and moral obligations. Furthermore, our assessment incorporates long-term commitments, litigation risks, and specific tax code implications. These factors are integrated into proprietary worksheets that cover unique, firm-specific areas often overlooked by leading NRSROs, sell-side analysts, or traditional advisors.<\/p>\n

2-Return on Invested Capital–<\/strong> This\u00a0presents<\/strong>\u00a0us with a real cash on cash return management has been able to earn on invested capital. It begins with our proprietary definition of free cash flow, not operating earnings, and then is based on our modeled return on capital and economic profits, as only Credit Trends defines such.<\/p>\n

3-Cost of Capital<\/strong>–\u00a0 \u00a0 CT Capital\u2019s models are engineered to capture the granular reality of an entity\u2019s operating and financial risk, with a heavy emphasis on a “credit-first” mosaic. Recognizing that critical liabilities are frequently obscured or located outside of primary regulatory filings, the framework performs a deep-dive forensic search to surface these hidden obligations. This exhaustive data gathering culminates in a comprehensive discount rate used to derive the intrinsic fair value of securities across the capital stack, including equity and debt. By synthesizing variables ranging from sales, input, and tax stability to litigation, yield spreads, and sovereign risk and all other factor unique to the firm, and captured via international. public, and private recources, including academia and high level credit analysts, the model provides a definitive measure of the genuine risk facing prospective free cash flows, and hence, cost of capital to both debt and equity.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

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CT Capital’s proprietary definition of cost of capital was developed using sophisticated modeling and analytic techniques supported by a decade of research. Its models consist of over 70 factors which result in a superior discounting mechanism from which to discount an entity’s free cash flows.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n
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CT Capital’s free cash flows result from converting to a quasi-cash accounting thru eliminating many of the accounting conventions companies utilize which can help create an “artificial” result. We also add to this result by incorporating enhancements such as evaluating unnecessary and exaggerated discretionary areas which could be used to enhance free cash flows.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n
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To learn more, please contact us:<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n

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Credit Trends was established to manage financial portfolios based upon: 1- Free Cash Flow-Represents the maximum amount of cash an entity can distribute to holders of various financial instruments from its operations. This calculation requires a rigorous analysis of discretionary expenditures, patent maintenance, and transportation costs, alongside the structural impacts of unions and patterns of […]<\/p>\n

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