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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments -- Ignore unavailable to you. Want to Upgrade?

To: Mad2 who wrote (17023)	9/6/2002 10:36:57 AM
From: Pink Minion	Read Replies (1) \| Respond to of 18998

Goodwill is the difference between what a company pays for a asset and the book value at the time of the transaction. That's when they buy another company. Don't they have to eventually write off what's above the value of the brand or IP? It seems to me, PG is saying the value of their brands is 13 Billion. Take that away, and all you get is a 2 percent dividend. So PG is selling for 10 times brand value. Point of my comment was "accounting book values" aren't very usefull (IMO) in valuing brand and IP products. That's what everyone should be argueing about. It shouldn't be any different than any other line item. Is inventory really worth what they say? Are they going to get paid on those net receivables? That goodwill value will matter if they're in a cash crunch and have to sell it off (not saying that'll happen). 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. Got some good examples?