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Technology Stocks : Dell Technologies Inc.
DELL 133.20+5.7%Nov 26 3:59 PM EST

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To: yard_man who wrote (103352)2/20/1999 2:30:00 PM
From: Chuzzlewit  Read Replies (1) of 176387
 
Tippett, there's a lot of good stuff on the Motley fool. A good general summary of academic financial thinking is A Random Walk Down Wall Street.

There were some excellent posts on the Dell thread over the last couple of days on ROIC. Sorry, I don't have them bookmarked, but maybe the posters will see this and post you.

Although dated, there are some excellent articles in Harvard Business Review's Financial Management 1983, John Wiley & Sons. Read pp 211-276.

I will think about some additional reading and PM you.

For now, here is how you calculate ROIC: the numerator is operating earnigns or, if you're like me you use free cash flow -- but feel free to use any measure of economic profit that you prefer. Just be consistent. The denominator is the sum of the previous period's equity and long-term debt.

Share buybacks have no affect on ROIC. Neither does leverage. That's why the method is so useful. You can peel back layers of financial strategies and look directly into the efficiency of the basic business.

TTFN,
CTC
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