Magic Formula ROIC Joel Greenblatt

rodumpierrez 7 years ago updated by shindig 4 years ago 2

i would love to see Joel Greenblatt's version of ROIC as you already provide the other half of it with Magic Yield. Return on tangible capital is a very intuitive and useful metric to have and tough to argue with his track record!! :)

While I do have a vague calculation for excess cash, does he specify his calculation for that?

i have not seen specifics other than his book but the following link is a good method to calc excess cash. I personally just add up (recvbl+inventory+other current assets) - (payables+deferred+other current liab)+Net Fixed Assets .. i should also do a better version accounting for excess cash correctly :(


Excess Cash = Cash - MAX(0; (Current Liabilities - Current Assets + Cash))