SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Greenblatt's Little Book That Beats The Market
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Shane M who wrote (60)2/7/2006 9:05:23 AM
From: bruwin   of 218
 
It seems to me that Joel Greenblatt et al, may be making a lot more of the "requirements" of Capital Employed than probably is necessary.
As far as I'm concerned, CAPITAL EMPLOYED doesn't have to consist of anything more complicated than the sum of :-

Share Capital :- Money obtained from selling shares to the public.
Reserves :- Algebraic sum of Bottom Line Profits or Losses.
Long Term Debt :- Interest bearing loans required to be paid over a period longer than 12 months.
Deferred Tax :- Money set aside, if any, to pay for future tax obligations.

To get ROCE, Joel Greenblatt should then divide the sum of the above by, in his opinion, EBIT and multiply by 100 to bring it to a percentage. As simple as that.
In our opinion, he should divide Profit Before Tax by the sum of the above.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News