How the calculation works
FUNDIVIO uses a plain, widely taught way of estimating what a business is worth. It relies only on figures the company reported in its own annual filings.
- Net assets. What the company owns minus what it owes, as shown on its balance sheet.
- Five years of profit. The average of up to the last five years of annual profit, multiplied by five. It gives credit for earnings the company has actually produced.
- Business value. Net assets plus five years of profit.
- Market value. The share price you enter multiplied by the number of shares the company has outstanding.
- Value gap. How far market value sits above or below business value, as a percentage of business value.
This is arithmetic on published numbers. It does not say whether any company or price is good or bad.
What it does not cover
- Old numbers. Figures come from the latest annual report on file, which can be many months old. Share counts come from the most recent cover page.
- Accounting values. Assets are counted at their accounting value, which can differ greatly from what they would sell for. Brands, technology and other things a balance sheet does not capture are left out.
- Negative net assets. If a company owes more than it owns, or its business value comes out at zero or less, no result is shown.
- Banks, insurers and real estate trusts. Their balance sheets work differently, and this method was not built for them.
- Coverage. US-dollar annual reports (Form 10-K) filed with the SEC. Companies that file foreign-company reports are not covered.
- Errors. Filings are reported by companies and read by software. Check anything important against the filing itself, linked from every result.