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Home Value Investing Calculating Growth Percentage

Calculating Growth Percentage
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1:41 am
January 12, 2010


Jae Jun

Admin

posts 1464
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It all depends on your preferences. If you want to include working capital, then FCF may be the better one. If you are looking for the actual profitability of the company, owner earnings is it.

I used to use CROIC but realized that management could make better returns with money than the business generated and it didn't feel right.

So just choose but make sure you understand why you are using Owner earnings or FCF or CROIC.

10:21 pm
January 10, 2010


Zefiro50

Washington

Member

posts 12
1

Hi Everyone.

As I get more experience in the art of value investing, I more inclined to tailor the spreedsheets field to accurately value certain company but today I have came to a fork on a road.

When determining the Growth percentage of a company using the DCF, I would like know if Owner's Earning FCF is what I should use for now on. I used to remember, it was the CROIC percentage, and there after FCF Growth percentage.

Is there any reason why Owner's Earning is now used? Is it more accurate or more conservative than the previous FCF, CROIC percentages?

Thank you all.

-SHM
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