AEVM: A Capital Efficiency and Liquidity-Driven Valuation Framework for Strategic Financial Assessment

This manuscript introduces the Alaali Economic Value Model (AEVM)—a proprietary, forward-looking valuation framework that addresses major limitations in traditional models such as DCF, EVA, and FCF. AEVM incorporates capital efficiency, liquidity risk, and sector-specific financial dynamics to generate more accurate and resilient firm valuations, particularly in capital-intensive industries. The model is applied to Aluminium Bahrain (Alba) and Alcoa Corporation to demonstrate its real-world diagnostic value, revealing how AEVM detects inefficiencies overlooked by standard valuation methods. Unlike conventional models that rely on static growth assumptions and market sentiment, AEVM emphasizes financial sustainability, operational soundness, and capital deployment quality. Important Note:The computational mechanics, scaling functions, and proprietary penalty modifiers within AEVM remain undisclosed to protect commercial confidentiality. This version is shared exclusively for academic visibility and authorship timestamping within the Alaali Financial Models Framework (AFMF). This document was originally submitted to SSRN (ID: 5197222) in March 2025 and is now publicly archived via Zenodo for citation, academic referencing, and licensing inquiries.