EXCERPT
In this context, K-I-S-S does not refer to the rock band, but to the adage “Keep it simple stupid.” The phrase was coined as part of a plea to military aircraft designers to build in such a way as to facilitate repair by a typical combat field mechanic with no more than a very basic set of tools. Beyond that, the phrase seems to have found another home in internet-era Wall Street, where data and tools are so ubiquitous as to make it seem that anybody could analyze stocks as well as any guru. FULL ARTICLE.
BY: Marc Gerstein
CATEGORY: What’s Working
Marc,
Is there any way to calculate a 5 or 10 year average EBIT with P123? I feel like this would be far more robust than a single year.
Thanks,
MG
You can do an approximation by using the line item variables. Operating Income (code: SOPI) is pretty close to EBIT. So a five-year average would be:
(ItemTTM(SOPI,0)+ItemTTM(SOPI,1)+ItemTTM(SOPI,2)+ItemTTM(SOPI,3)+ItemTTM(SOPI,4))/5
Actually, it would probably be best to use that to create a custom formula which you can call 5YrAvgEBIT, or more precisely, 5YrAvgOpInc.
Any reason that the actual Magic Formula Screen consistently has Microsoft (MSFT) as an output, but the pre-defined screen in Portfolio123 doesn’t? I tried to expand the list to include the highest 50 ranked stocks, but to no avail… still no Mr. Softy.