Back-testing of CFIRR over the past six years, period ending April 7, 2022 showed companies with the highest CFIRR produced the highest stock market returns, with the lowest volatility, and the lowest churn as expected. CFIRR was a better indicator than ROE and ROIC. This was a very interesting period to examine as it included … Continue reading CFIRR is Better Signal Than ROE or ROIC
Accounting distortions
Why You Should Add Back Accumulated Depreciation
why-you-should-add-back-accumulated-depreciation-1Download We made an extraordinary claim that Wall Street has been using a flawed ROA metric for over a century. The ROA metric which includes the accumulated depreciation distorts the true return on capital and economics of the business because it does not use the original amount money invested in the business. Investors recognize that … Continue reading Why You Should Add Back Accumulated Depreciation
Share Repurchases are Creating Distortions in Stock Market Data
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