Used to take Greenblatts formula to derive the invested capital for the ROIC calculation (receivables + net PP&E + inventories - payables). Are the right to use assets from ifrs16 accounted for at all in the calculation? Strictly speaking Nopat is derived from leased assets, so wonder if and how to account for leased assets in the ROIC calculation. Thanks
Trending Content - Investment Banking Forum
| +349 | Evercore Intern Seizure | 56 | 3h |
| +60 | JPM M&A is Gone??? Purely Coverage Banking??? | 30 | 4h |
| +57 | Is DCM actually underrated ? | 24 | 6h |
| +48 | Losing my personality in Banking | 9 | 6h |
| +48 | How do I understand vs. just memorizing? | 6 | 5h |
| +47 | Are all Tech / TMT groups sweaty? | 38 | 10h |
| +42 | Associate & Above IB exits | 16 | 3d |
| +39 | Am I behind? 31 Year Old Analyst | 9 | 2d |
| +32 | Incoming IB Analyst: Best Ways to Prepare? | 10 | 3h |
| +27 | Which groups are ideal for laterals? | 12 | 5h |
Career Resources
Some companies that follow IFRS do include lease RoU assets in net PP&E (in which case you are fine), but some report lease RoU assets on a separate B/S line item (i.e. in which case you will need to account for them them separately).
Unfortunately the only universal solution is to skim through the company's AR to see where they report their RoU assets and figure out whether you need to add them them separately (assuming of course that your NOPAT indeed does not include any lease/RoU depreciation expense)
Is there an adjustment for the lease liabilities as well? And any adjustment for the NOPAT?
Officia possimus quas et sed sunt quia explicabo. Omnis vitae nemo ratione dolorem. Rem et qui repudiandae exercitationem aut iusto. Est modi aut est occaecati.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...