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LESSON THREE: The V Formula - A Shortcut To Computing Return on Equity

In this lesson you’ll discover the details on the V Formula, a simple way to compute the pre-tax rate of return, created by Chris Volk, CEO of STORE Capital. Just tuning into STORE University for the first time? Head back to Lesson 1 and 2 to become proficient in valuing your business and calculating your return on equity to get really rich!

What is the V Formula? Chris Volk created the V Formula - learn this simpler way of computing pre-tax rate of return.

LESSON THREE, PART ONE

What is the V Formula?

Is there a simpler way of computing pre-tax rate of return? The answer is yes! Chris Volk, CEO of STORE Capital, created the V Formula. Learn more from Chris about the creation of the V Formula in STORE University’s Lesson 3 Part 1.

V Formula Variables Chris Volk's V Formula has six variables. Learn about the first three variables: sales, investment and annual capital investments.

LESSON THREE, PART TWO

V Formula Variables

There are six variables in the V Formula. The initial three variables are sales, investment and annual capital investments. Chris Volk, CEO of STORE Capital, will walk you through the details on the first three variables of the V Formula.

Putting the Variables to Work Learn the other three V Formula variables: profit margin, debt and equity mix and the cost of Other People’s Money (OPM).

LESSON THREE, PART THREE

Putting the Variables to Work

Now that you’ve discovered the details on the initial three variables of the V Formula, it’s time to dive into the remaining three variables: profit margin, debt and equity mix and the cost of Other People’s Money (OPM). Combine the six variables in the V Formula and discover the shortcut of how to compute your return on equity. Chris Volk, CEO of STORE Capital, will show you how it’s done.

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