6 Comments
User's avatar
Boris S.'s avatar

I love these "quick-hit" or "quick-check" ratio checklists. They enable us to get a feel for the state of a company. From there we can decide to dig deeper or to pass on it. 👍

I get hung up on the denominator in the ROIC calculation. How do we define "invested capital"? This isn't something we can directly find listed on a balance sheet. The number must be calculated. It seems to be a little different for different companies, depending on their business model.

Is there a summary somewhere that collects the different ways to calculate "invested capital" for different business models?

Compounding Quality's avatar

I appreciate your feedback, Boris!

Already looking forward to the publication of your interview! :)

Dan Gifford's avatar

Awesome list! Understanding FCF Yield and applying it to my own analysis has transformed the way I value companies over the years.

Compounding Quality's avatar

In the end, it's all about Free Cash Flow!

Dan's avatar

Thanks.

Compounding Quality's avatar

I appreciate you, Dan!