On Magic Formulas and Diaper materials
The ‘Magic Formula’ chooses companies through a ranking system. Those companies that have both a high return on capital and a high earnings yield are the ones that the formula ranks as best.
2 + 3 ≠ 2 “+” 3
2 + 3 = 2 × 3
Ranking Formula:
ROC × E/P
The ‘Magic Formula’ chooses companies through a ranking system. Those companies that have both a high return on capital and a high earnings yield are the ones that the formula ranks as best.
2 + 3 ≠ 2 “+” 3
2 + 3 = 2 × 3
Ranking Formula:
ROC × E/P