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?
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?
I appreciate your feedback, Boris!
Already looking forward to the publication of your interview! :)
Awesome list! Understanding FCF Yield and applying it to my own analysis has transformed the way I value companies over the years.
In the end, it's all about Free Cash Flow!
Thanks.
I appreciate you, Dan!