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Home Value Investing Return on Total Capital?

Return on Total Capital?
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1:38 pm
April 27, 2010


Jae Jun

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For ROC (net income+minority interest + tax adjusted interest)/(tangible assets-short-term accrued payables)

This requires some more math to get the correct answer.

Tax adjusted interest, tangible assets and short term accrued payables is not explicitly mentioned in the balance sheet.

You have to manually calculate each one.

(If anyone sees a mistake I made, please reply here. I may be incorrect as well.)

Tax adjusted interest: Find the number for interest income then multiply by the tax rate of that year and subtract it from the original interest.

Tangible assets: Find the total assets and then subtract out all the intangibles and goodwill.

Short term acrued payables: I think it means acrued liabilities but only the payables portion.

1:22 pm
April 27, 2010


Jae Jun

Admin

posts 1336
2

(moved from the double post to combine with this one)

WilliamMunny says:

as defined by Security Analysis is (net income+minority interest + tax adjusted interest)/(tangible assets-short-term accrued payables). Simple enough to find net income and minority interest, where would I be able to locate the rest of the entries on the balance sheet? Also in Buffetttology return on total capital is net earnings/ total capital…is this the same calculation? Thanks.

3:16 pm
April 26, 2010


WilliamMunny

New Member

posts 2
1

Need help in calculating ROC.  As defined by Security Analysis is (net income+minority interest + tax adjusted interest)/(tangible assets-short-term accrued payables). Simple enough to find net income and minority interest, where would I be able to locate the rest of the entries on the balance sheet? Also in Buffetttology return on total capital is net earnings/ total capital…is this the same calculation? Thanks.
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