ryanlb

futurefinanceguru Wrote:
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> Does any one know why intrinsic P/E doesn't
> include franchise factor when inflation
> flowthrough is given?
> intrinsic P/E = tangible P/E + franchise factor
>
> tangible P/E = 1/r
>
> However, in the P/E with inf. f.t formula
>
> intrinsic P/E = 1/(real r + (1 - infl.
> f.t.)*inflation)). The denominator is effectively
> inflation adjusted r (adjusted for the
> flowthrough)... Where is the Franchise factor?
>
> ====
> Also from the same exam:
> How efficiently a firm uses it's assets is
> indicated by ROA or Asset Turnover? The example
> uses Asset Turnover, but shouldn't it be ROA as
> ultimately net profits matter more than sales?


where do you see that?