Posts in Definitions

Naughty numbers and intangible tangibles

The first exhibit in what may become a collection of naughty numbers is Carphone Warehouse's price to tangible book value.

Cash flow check on accounting

Cash flow from operations or free cash flow? Pardon the technical post and the prosaic title, but I hope it will explain why I rejected Smith & Nephew but retain Castings in the Thrifty 30. Smith & Nephew makes human parts (replacement knee joints for example) and Castings makes car parts, like steering knuckles.

EBIT explained

A new series on frequently used terms starts

Where you’ll see EBIT

EBIT is used in Joel Greenblatt’s Magic Formula as the profit measure and numerator of the Return on Capital and Earnings Yield calculations.