Value in 60 Seconds: Our ROIC calculation versus Bloomberg's

4 Jul 2023 · 1 min

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New Constructs' ROIC calculation differs significantly from Bloomberg's, particularly in invested capital figures. An Ernst & Young appendix validates New Constructs' methodology, and institutional clients pay for their "clean" ROIC number despite already subscribing to Bloomberg.

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In that Ernst Young paper, you'll see that there's an appendix. One of the things they do is compare new constructs to Data House A and Data House B. Data House A is Bloomberg. I think the company in Peer 1 is Comcast. So a major mega-cap company, no excuse for getting the numbers wrong. And you can see our NOPAT is very different from the Bloomberg. And I will tell you, we have some institutional clients who of course subscribe to Bloomberg, but also subscribe to New Constructs because they want a clean ROIC number. That's one of the things they pay us a lot of money for every year. This is extremely difficult data to get and valuable data to have. On the invested capital side, you can see a very big difference between what Data House A and what New Constructs has. I always like proof that comes from somebody besides me because you don't have to trust that I'm telling you the truth. You get to trust that Ernst Young, one of the most respected auditing firms in the world, is telling the truth.