Registered Rep Interview on Economic vs Accounting Earnings
David A. Geracioti, Editor-In-Chief of Registered Rep magazine, recently invited me for an interview on why economic earnings matter when selecting stocks, mutual funds and ETFs. Most investors do not...
View ArticleClik here to view.
Definition: Price-To-EBV, or Price to Economic Book Value ratio
The price-to-economic book value (“Price-to-EBV”) ratio measures the difference between the market’s expectations for future profits and the no-growth value of the stock. Economic book value (“EBV”) is...
View ArticleROIC: Definition And Formulae For Return On Invested Capital
ROIC is the true measure of a company’s cash on cash returns. Formula: NOPAT/Invested Capital or NOPAT/Revenue * Revenue/Invested Capital. It is the most important and truest measure of profitability....
View ArticleClik here to view.
NOPAT: Definition And Formulae For Net Operating Profit After-Tax And NOPAT...
NOPAT is the after-tax operating cash generated by the business, excluding unusual losses and gains, financing costs, goodwill and other non-cash items. It can be calculated two mathematically...
View ArticleClik here to view.
Invested Capital: Definition And Formulae
Invested capital equals the sum of all cash that has been invested in a company over its life without regard to financing form or accounting name. It is the total of investments in the business from...
View ArticleWACC: Definition And Formula For The Weighed-Average Cost Of Capital
Weighted-Average Cost of Capital (WACC) is the average of debt and equity capital costs that all publicly traded companies with debt and equity stakeholders incur as a cost of operating. Below we...
View ArticleFree Cash Flow (FCF) and FCF Yield
Free cash flow (“FCF”) equals NOPAT minus change in Invested Capital. FCF reflects the amount of cash free for distribution to both debt and equity shareholders. FCF Yield = free cash flow/enterprise...
View ArticleClik here to view.
Growth Appreciation Period (GAP)
The Growth Appreciation Period is the number of years that a business is expected to earn an ROIC greater than WACC on new investments. GAP is the amount of time a business can grow its economic...
View ArticleClik here to view.
How New Constructs’ Discounted Cash Flow Model Works
Per How to Make Money Picking Stocks, our models focus on quantifying the expectations for future cash flows embedded in the market price or any target price. Our goal is to help clients identify and...
View ArticleEnterprise Value – Definition and calculation
Enterprise value represents the value of the firm to all stakeholders. Investopedia defines enterprise value as “…market cap plus debt, minority interest and preferred shares, minus total cash and cash...
View ArticleEconomic Versus Accounting Earnings
Accounting data was not designed for equity investors, but for debt investors. "Earnings, earnings per share and earnings growth are misleading measures of corporate performance."(from page 66 in The...
View ArticleAnalyst Notes: Definitions
The “Analyst Notes” column on the stock screener at newconstructs.com features insights into corporate events or disclosures that cause us to question the validity of a company’s financial reporting or...
View ArticleEconomic Versus Accounting Earnings
Accounting data was not designed for equity investors, but for debt investors. "Earnings, earnings per share and earnings growth are misleading measures of corporate performance."(from page 66 in The...
View ArticleRegistered Rep Interview on Economic vs Accounting Earnings
David A. Geracioti, Editor-In-Chief of Registered Rep magazine, recently invited me for an interview on why economic earnings matter when selecting stocks, mutual funds and ETFs. The post Registered...
View ArticleDefinition: Price-To-EBV, or Price to Economic Book Value ratio
The difference between the stock price and Economic Book Value (EBV) of s stock measures the difference between the market's expectation for future profits and the no-growth value of the stock. The...
View ArticleROIC: Definition And Formulae For Return On Invested Capital
ROIC is the true measure of a company's cash on cash returns. The post ROIC: Definition And Formulae For Return On Invested Capital appeared first on New Constructs.
View ArticleNOPAT: Definition And Formulae For Net Operating Profit After-Tax And NOPAT...
NOPAT is the after-tax operating cash generated by the business, excluding unusual losses and gains, financing costs, goodwill and other non-cash items. The post NOPAT: Definition And Formulae For Net...
View ArticleInvested Capital: Definition And Formulae
Invested capital equals the sum of all cash that has been invested in a company over its life without regard to financing form or accounting name. The post Invested Capital: Definition And Formulae...
View ArticleWACC: Definition And Formula For The Weighed-Average Cost Of Capital
Weighted-Average Cost of Capital (WACC) is the average of debt and equity capital costs that all publicly traded companies with debt and equity stakeholders incur as a cost of operating. The post WACC:...
View ArticleFree Cash Flow (FCF) and FCF Yield
Free cash flow ("FCF") equals NOPAT minus change in Invested Capital. The post Free Cash Flow (FCF) and FCF Yield appeared first on New Constructs.
View Article
