Valuation Tools Webcast #7: Measuring Accounting Returns

The return on equity and invested capital are key to estimating growth and value at companies, but they are accounting numbers and need tender care and attention.
Walmart (2013): www.stern.nyu.edu/~adamodar/pd...
Walmart (2012): www.stern.nyu.edu/~adamodar/pd...
Spreadsheet:www.stern.nyu.edu/~adamodar/pd...

[@pramitmehta258]

Thank you so much Professor.

[@eshaanarora24]

Thanks, Professor for an insightful video. I have a question, why does minority interest not get added back for calculating invested equity? Because PAT includes income from minority interest as well if I am correct

[@markgoh8302]

Professsor, for is deferred taxes considered part of invested capital? thanks!

[@tenzin5960]

Thanks, Professor, but regarding the goodwill and cash in the excel sheet, I have one question about the formula you have used. I think if you want goodwill or cash's certain percentage lets say 10% to be included in invested capital, you just have to minus the 90% amount from the book value of equity and debt rather than subtracting 90% of the amount and then adding back 10%. My logic behind the assumption is goodwill and cash are already included in the book value of equity and debt. I might be wrong so can you help with that?

[@JonesDawg]

You are correct if you calculate IC from the finance side i.e. debt and equity and you consider 90% of cash and goodwill non-operating assets you have to subtract them and the 10% would already be represented in the debt and equity.

[@joaogomes778]

O Sr. Fala muito rápido e passa por cima de contas breves como se fossem miudezas. São para si, mas quem quer aprender não! 😢