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Strategies & Market Trends : Greenblatt's Little Book That Beats The Market -- Ignore unavailable to you. Want to Upgrade?

To: bruwin who wrote (156)	4/6/2008 10:47:05 AM
From: jsabelko	Read Replies (1) \| Respond to of 218

Bruwin, Hi. Haven't chatted with you in a while and I ran across your post on woof. I was intrigued by the post below in the use of capital employed as I've always questioned how to "best" calculate this and figured you'd be a good individual to ask. Along these line my understanding is most people just calculate capital employed as total asset - current liabilities = employed capital = capital employed This is very easy quick calculation for screening but my questions have always arisen around the treatment of goodwill and intangibles. Am I missing the obvious or does this essentially count goodwill and intangibles as capital employed? To look at a given companies efficiency in use of resources on a go forward basis wouldn't it be more meaningful to calc something such as total assets - goodwill - intangibles - current liabilities = "modified capital employed" or whatever one would want to name it? I use this occasionally but confess I just use logic, common sense and I'm not up on all the correct names for all the acronyms and ratios so maybe this already has a name. Regardless I'm just curious your thoughts on this and exactly how you calculate capital employed. thanks, joby