100investmentbooksayear

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• 100investmentbooksayear

  100investmentbooksayear Don’t take asset values on balance sheet at face value The figures for assets in the balance sheet can be misleading. Things like real estate, machinery and other equipment an...

• EBIT/EV ratio – alternative to PE ratio for calculating earnings yield | 100investmentbooksayear

  The concept of earnings yield is to figure out how much a business earns relative to the purchase price of the business (for EP), or relative to its investment (for EBIT/EV). Earnings yield using PE r...

• Financial Shenanigans and Quality of Earnings | 100investmentbooksayear

  Financial shenanigans are actions taken by management that mislead investors about a company’s financial performance or economic health. As a result, investors are often tricked into believing that a ...

• ROIC | 100investmentbooksayear

  ROIC measures the efficiency of total capital deployed (and thus more investment focus). Calculate each year going back 5-10 years and look for a pretty stable and usually earns about 20% on invested ...

• PNL adjustments | 100investmentbooksayear

  Purpose of PNL adjustment: Adjusted EBIT removes non-recurring and non-operating gains and losses, accounting distortions and reclassifying some expenses as investments (capitalizing them to balance s...

• Investing Methodology – How to choose a company to buy? | 100investmentbooksayear

  Steps 1a. Special situations 1b. If no special situation, carry out a stock filter 2a. For companies shortlisted so far, initial understanding of company 2b. Further understanding of the company + Qua...