AI Blocks › Handle money and investing
See what a company's earnings support, and how much of the price is hope
Paste normal earnings and the share price. Get a low, middle and high value and how much of the price is hope.
Earnings value range builder is a free AI skill for the job "Handle money and investing". Give the instructions to an AI assistant that supports the required files and tools, then review its output.
Free · No account · Made by AI Blocks · Level: advanced · Thinking: high
What it does
Many people value a company by the latest year's profit times a number they have heard. That gives a neat answer and a poor one. The profit swings, the number is a habit, and the result says nothing about how much of the price is a bet. This skill uses a range of normal earnings and picks a multiple for the business, with a hard ceiling at 20 times for anything called an investment. It checks the multiple against interest rates, applies a floor on earnings yield, and adjusts for debt and preferred shares ahead. Then it splits the price: the part that normal earnings support, and the part paid for results not yet shown. It is a method, not financial advice, and never says buy or sell.
You give it
- Low, normal and high earnings per share from "Normal earnings estimator"
- The share price and share count, or the asking price of a private business
- Debt and preferred shares ahead of the ordinary shares (optional)
- The yield on top-grade bonds today (optional)
- Source text (optional)
You get
- A multiple with the reason for it
- A low, middle and high value per share and in total
- A cross-check against interest rates
- The earnings yield and whether it clears the floor
- The price split into an investment part and a speculative part
Use it when
- You know what a company earns in an ordinary year and want to see what that supports.
- A share price looks high and you want to know how much of it rests on growth that has not happened.
- You are weighing a price for a small business and want a range, not one number.
How to use it
- Start a chat with the skill. Open it if you added it to your AI, or copy it and paste it in.
- Paste the earnings range, the price and the debt ahead of the shares.
- Say what you know about how stable the business is.
- Read the split of the price before the range.
- Take the result to "Asset floor estimator".