Hello from Huskeez!

[Huskeez]

Hi guys i have been browsing these forums for a while now and have decided to finally sign up and introduce myself!

I am 27 years old and have been hugely in debt ever since i started full time employment when i left school in 2004, and im talking about from my first pay check on ( with my first pay , i went and brought a 0% deposit $20,000 car over 5 years @ %17 interest )

Yes very stupid! , these kind of purchases landed me hugely in debt living from paycheck to paycheck i think at 1 time i had 8 higher purchases and 2 credit cards, owning 0 assets.

Anyways i decided to work out and evil budget and from April 2012 - November 2012 i was able to clear all my debt and now for the first time in my working life i am .. Debt free! Starting from scratch, and working on my building up my net worth.

I have $700 per week disposable income , have recently opened up an ASB Securites account, and am continually reading and learning about Fundamental Analysis , Technical Analysis. Currently i am reading Peter Lynch's - Beat The Street which so far is very good and sets fuel to the fire

I will end this introduction with a question as i am still new and will need alot of help!

When working out the ROC of a company, I understand it as

Net Income / Shareholders Equity + Longterm Debt x 100 = ..

Now when using Yahoo Finance NZ to look at the financials of Company, Most times the Total Shareholders Equity is left blank.

Is this really as simple as Total Assets - Total Liabilities = Shareholder Equity?

Thanks People look forward to learning from all you GURUS

[Lizard]

Welcome Huskeez. Sounds like you have done a great job of turning your financial position around and $700/week of disposable income should build into investments quite quickly. Peter Lynch is my favourite sharemarket read and I think you should do well trying to replicate some of his methods.

Re ROC, yes, you are correct re shareholder equity being the difference between assets and liabilities. Your equation for ROC needs to have "shareholders equity+long term debt" in brackets (and make sure debt is expressed as a positive number, not negative).

Best wishes.

[Huskeez]

OK well here is one , https://www.nzx.com/files/attachments/163885.pdf

Now this financial report has the total assets , total liabilities and net income for 2012.

How do i calculate the long term debt? I know to some of you this is probably a laughable question but hey! I'm just new

[Huskeez]

Sweet i have heard of both. I have Intelligent Investor , but want to make sure i understand it when i read it so i will keep reading the others i have as i would like to build a foundation first before i dive into the "Holy Grail" . I will add One up on wall street" to my list!

Thanks for the recommendations guys ! Your all awesome

[buns]

Page 27. Look for any thing that looks like a loan in the non current liab section.

In this case its 10.3m.

[Huskeez]

Page 27. Look for any thing that looks like a loan in the non current liab section.

In this case its 10.3m.

Awesome thanks mate,

OK well my calculations for an ROC ratio are as follows, please correct me if i am wrong im here to learn.

Using the 2012 financial report for Skellerup https://www.nzx.com/files/attachments/163885.pdf

Net Income - 24,448
Total Assets - 174,762
Total Liabilities - 53,372

Shareholder Equity - 121,372
Longterm Debt - 10,321

24,448(NetIncome)/131,693 (Shareholder Equity+Longterm Debt) = 0.1856 x 100 = ROC 18%

Hows that?

[Huskeez]

Read I.I. once a year! I probably read certain chapters once every two months.

Ok i will finish Beat The Street first then rip into it , i hear Security Analysis by Mr Graham is great too!

[Halebop]

Hows that?

All good.

You may want to consider the impacts intangible assets have on "return on x" metrics. Imagine Skellerup have a competitor called "Skellerclone" who are a mirror image company except they have no goodwill on their books. We'd have two companies doing the same thing, producing the same profits, sharing the same quantum of tangible assets but Skellerclone would appear to offer superior return economics just because there was no goodwill on it's books.

Would this be a fair and sensible characterisation to make?