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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments

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To: Pink Minion who wrote (17022)9/6/2002 1:51:33 AM
From: Mad2  Read Replies (1) of 18998
 
Goodwill is the difference between what a company pays for a asset and the book value at the time of the transaction.
Point of my comment was "accounting book values" aren't very usefull (IMO) in valuing brand and IP products.
P&G is a very old company. Old companies can have tremendous value (intangible or depreciated) that is non-existant in the book.
In case of P&G they show around 13.3 bil of shareholder equity and roughly the same amount of goodwill on balance sheet. By itself meaningless, however changes on the balance sheet in comparing with changes on income stmt reveals quite a bit about companies core business and return on capital (management effectiveness) derived from managements investment decisions.
m2
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