How are you calculating that?

Andrew Carpenter
August 17, 2016

Intrinio likes to give its users the flexibility to calculate their own metrics and ratios - if you can see what is under the hood, it makes it easier to understand what the data is telling you. We do, however, calculate more than 100 of these data points for you, which saves time and computing power on your end.

Most investors don't care, or need to know the subtleties that go into calculating some of the more complex ratios, but for more advanced users the differences in methodologies can make a big difference. This post outlines a few of the data points that users have asked about. Feel free to post any you are interested in in the comments and we will add them as well.

Invested capital:

invested_capital = ( notereceivable + account_receivables + inventory + prepaid_expenses + currentdeferredtaxassets + other_current_assets + net_ppe + noncurrentnotereceivables + goodwill + intangible_assets + noncurrentdeferredtaxassets + employeebenefitassets + other_noncurrent_assets ) - ( accounts_payable + accrued_expenses + customerdeposits + currentdeferredrevenue + currentdeferredtaxliabilities + currentemployeebenefitliabilities + othertaxespayable + other_current_liabilities + assetretirementandlitigationobligation + noncurrentdeferredrevenue + noncurrentdeferredtaxliabilities + noncurrentemployeebenefitliabilities + other_noncurrent_liabilities )

ROIC (return on invested capital):

ROIC =  NOPAT / Average Invested Capital

NOPAT (net operating profit after tax):

NOPAT = Operating Income * (1- Tax Rate)

Invested Capital:

Invested Capital = Current Assets - Cash + PPE + All Long Term Operating Assets - Total Liabilities + Debt + Capital Leases

Free Cash Flow to Firm:

We calculate Free Cash Flow to Firm as NOPAT -/+ Change in Invested Capital. Our methodology is different than normal convention due to our use of modern valuation methods as the backbone of our data offering. You can take a look at this presentation that influenced our calculation.

Return on Invested Capital:

ROIC it is NOPAT / (Invested Capital t + Invested Capital t+1) / 2.

The Quick Ratio:

quick_ratio = (cash + short_term_inv + note_receivables + accounts_receivable) / total_current_liabilities. We use the tag 'quickratio' and it is available in the historical and datapoint endpoints.

Beta:

Intrinio's basic beta tag is simply "beta" and it uses the formula for covariance:

beta = Covariance (Ra,Rb)/Variance(Rb).

The Rb value in this case is the S&P 500 while Ra is the stock price of interest. Our default beta uses 3 years of weekly price data, however we do offer several betas that are calculated with different ranges of price data:

ten_yr_weekly_beta

seven_yr_weekly_beta

five_yr_weekly_beta

three_yr_weekly_beta

one_yr_weekly_beta

ten_yr_monthly_beta

seven_yr_monthly_beta

five_yr_monthly_beta

three_yr_monthly_beta

one_yr_monthly_beta

Return on Equity:

Intrinio uses an average of total equity for the period.

Shares Short:

We use the tag short_interest to represent the actual number of shares being shorted by market participants.

Shares Outstanding:

This comes right from the income statement. Weighted average basic, weightedavebasicsharesos, diluted shares outstanding, weightedavedilutedsharesos, and a combination of the two, weightedavebasicdilutedsharesos, are available.

Days to Cover:

days_to_cover = shares_short/avg volume

Note- this makes days to cover a ratio so it counts as float.

EBIT:

Total Operating Income + Other Non-operating Income (Expense)

Cash Per Share:

We don't have a tag for "cash per share," but you can easily calculate it on your own. There are several approaches to calculating this depending on your interpretation of "cash":

(cashandequivalents / weightedavedilutedsharesos)

(cashandequivalents + shortterminvestments / weightedavedilutedsharesos)

(cashandequivalents + shortterminvestments + longterminvestments / weightedavedilutedsharesos)

Ready to put your knowledge to use? Request a consultation with our team to build your custom data solution.

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