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Hello,
I have some trouble calculating the return on capital in Joel Greenblatt's Magic Formula as I cannot find the “net fixed assets” data in the fundamental data.
The return on capital in Joel Greenblatt's Magic Formula is defined as:
return on capital = EBIT / (net fixed assets + working capital).
Currently my implementation is as follows. I know net tangible assets is not the same as net fixed assets, but it is the closest I can come. How can I correct this so the net fixed assets are used?
netTangibleAssets = qb.GetFundamental(ticker,
"FinancialStatements.BalanceSheet.NetTangibleAssets.ThreeMonths",
today,
today)
print(netTangibleAssets)
properties = qb.GetFundamental(ticker,
"FinancialStatements.BalanceSheet.Properties.ThreeMonths",
today,
today)
print(properties)
workingCapital = qb.GetFundamental(ticker,
"FinancialStatements.BalanceSheet.WorkingCapital.ThreeMonths",
today,
today)
print(workingCapital)
returnOnCapital = ebit / (netTangibleAssets + workingCapital)
print(returnOnCapital)Cheers
Varad Kabade
Hi Tom Janssens,
Our fundamental data sets from MorningStar don't include a "net fixed assets" property. When calculating the Greenblatt Magic Formula, we recommend ranking companies on their return on capital by using their forward ROA. See the GreenblattMagicFormulaAlpha for reference.
Best,
Varad Kabade
Tom Janssens
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