The Hurdle of Intrinsic Value Sustainability and ROIC Sustainability

The Hurdle of Intrinsic Value Sustainability and ROIC Sustainability

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Earnings = Net Profit or NOPAT.

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(1)

The Hurdle of Intrinsic Value Sustainability

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If:

(1 + Gearnings_ratio)² ÷ ( 1 + Ginvested_capital_ratio) ≥ 1

, the intrinsic value sustains or grows.

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(2)

The Hurdle of ROIC Sustainability

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If:

(1 + Gearnings_ratio) ÷ ( 1 + Ginvested_capital_ratio) ≥ 1

, the ROIC sustains or grows.

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Remark:

If a stock could wandering between (1) & (2), it is definitely a GREAT COMPOUNDER.