The article discusses how to calculate and interpret residual income, economic value added, and market value added in order to determine the intrinsic value of a common stock. It explores the uses of residual income models and compares them to other present value models. The research explains the fundamental determinants of residual income and how it relates to the justified price-to-book ratio based on forecasted fundamentals. It also covers how to calculate the intrinsic value of a common stock using different residual income models and how to estimate continuing residual income at the forecast horizon.