It’s #QualityTuesday! In this series, I’ll teach you 5 things about the stock market in less than 5 minutes. Do you want a handy PDF with 50 timeless investing principles visualized in 1 PDF? You can grab it for free in this article.
CQ, I love Naval Ravikant's life formulas. They are so simple and yet so powerful. I read his book this summer while on vacation. Thank you for recommending it to me.
Goodwill is calculated by taking the purchase price of a company and subtracting the difference between the fair market value of the assets and liabilities.
When this number is really high, it means that the company acquired companies for way above their book value in the past.
Goodwill is a part of a company's assets and when for example 50% of the company's assets consist of goodwill, it means that a lot of assets the company has on its balance sheet are not 'tangible'.
The company can never sell goodwill to increase its cash position while it can do this by selling buildings, machines, ...
Send it to all of the Business and Economics teachers ;)
A professor from an US university actually asked to use the visuals in his course recently! :)
Love it!
Now if my little publication could get that done......
Keep publishing consistently. You'll get there!
I could use some of that compounding right about now ;)
Thanks!
Very profound insights
It's an honor, Raphael!
CQ, I love Naval Ravikant's life formulas. They are so simple and yet so powerful. I read his book this summer while on vacation. Thank you for recommending it to me.
Awesome content as always! Thank you!
Thank YOU, Pavel!
I should reread Naval's book next summer. I absolutely LOVED the 2 books you gave me in Omaha. :)
Talk to you soon.
Thank you!
Can you explain the importance of goodwill / asset ratio?
The lower goodwill/assets, the better.
Goodwill is calculated by taking the purchase price of a company and subtracting the difference between the fair market value of the assets and liabilities.
When this number is really high, it means that the company acquired companies for way above their book value in the past.
Goodwill is a part of a company's assets and when for example 50% of the company's assets consist of goodwill, it means that a lot of assets the company has on its balance sheet are not 'tangible'.
The company can never sell goodwill to increase its cash position while it can do this by selling buildings, machines, ...