11 Comments
Sep 18, 2022Liked by Edelweiss Capital

Very nice piece.

And I agree - I've never quite understood why some people exclude goodwill when calculating invested capital. It was certainly paid for, it was a real cost! However, I do understand isolating to calc things such as return on net tangible assets. That helps provide context into understanding the physical demands of the company as it grows and matures and helps illustrate what kind of operating leverage can be achieved from G&I.

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Can you kindly explain how you derived (as well as the rational) the CAGR 5 years=(1+5y Reinvestment rate * 5y ROIIC) * (1+5y Multiple expansion) * (1-5y % Shares repurchased) + (5y Accumulated dividends / Initial share price)?

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Please could you breakdown the math behind the "expected share price appreciation 5 year period" of 311%

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Whats the thinking behind the Tax Shield?

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