Greenblatt's Little Book That Beats The Market Message Board

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Strategies & Market Trends : Greenblatt's Little Book That Beats The Market

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To: Stewart Whitman who wrote (61)	2/11/2006 9:45:46 PM
From: Shane M	Read Replies (1) of 218

Hi Stew, I ran across this on the FAQ on Greenblatt's site. While I don't think it's mentioned in the book, I think you might be correct about the addition of other assets into his ROC calc. magicformulainvesting.com Q: Why might the results of my calculations of earnings yield and/or return on capital differ from the ones found on the magic formula website? <some snipped> Some common differences in calculations of these ratios are adjustments for “excess cash” (cash not necessary to conduct operations), “net working capital” (generally, current assets less excess cash less non-interest bearing payables), the calculation of “enterprise value” (which subtracts excess cash and includes any preferred stock) and the treatment of “other assets”.

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