Last month I took a position in Judges Scientific and I just finished the deep dive written together with Compounding Quality (CQ). I hope you will enjoy it!
Thanks for sharing. in your screenshot you show a ROIC of only 12% while you mention at the beginning an organic ROTIC: 33.5% and Total ROTIC 20.7%. Shouldnt these metrics be really similar?
Thanks for your comment. As mentioned in the article: "The annual Return on Total Invested Capital (ROTIC) is probably the best metric to look at for Judges Scientific. The annual ROTIC is calculated by comparing attributable earnings (excluding central costs, adjusting items, and before interest, tax, and amortization or EBITA) with the total capital invested."
So reason is that you want to adjust for acquisition related cost and amortization to get a fair picture on the return on investments. That is why I take the ROTIC which Judges Scientific is reporting as well.
Yes I read that but did not think that there is such a huge gap. I just compared it to Momentum Group (business should be comparable from the metrics), but they have far higher ROIC. So wondering...
Thanks for sharing. in your screenshot you show a ROIC of only 12% while you mention at the beginning an organic ROTIC: 33.5% and Total ROTIC 20.7%. Shouldnt these metrics be really similar?
Thanks for your comment. As mentioned in the article: "The annual Return on Total Invested Capital (ROTIC) is probably the best metric to look at for Judges Scientific. The annual ROTIC is calculated by comparing attributable earnings (excluding central costs, adjusting items, and before interest, tax, and amortization or EBITA) with the total capital invested."
So reason is that you want to adjust for acquisition related cost and amortization to get a fair picture on the return on investments. That is why I take the ROTIC which Judges Scientific is reporting as well.
Yes I read that but did not think that there is such a huge gap. I just compared it to Momentum Group (business should be comparable from the metrics), but they have far higher ROIC. So wondering...