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Data Discrepencies
Posted by: jyorkcar (IP Logged)
Date: October 21, 2010 04:36AM

Hi,

I found this site a few weeks ago and I LOVE the charts. I just signed up today too! However, I have a very serious concern about the accuracy of the data posted for the 10 year financial history. I was reading "Buffetology" and they use H&R Block as an example that provided Return on Equity for the year 2001 of 29.7%, and I looked up HRB on here and its listed ROE of the same year is 24%. Which is the correct value??? I also found another discrepency with GM. Again, I am greatly concerned about the data provided, and I have no idea how to verify its accuracy. Please HELP!

Thanks.



Stocks Discussed: HRB,
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Re: Data Discrepencies
Posted by: gurufocus (IP Logged)
Date: October 21, 2010 07:29AM

hi, Jyorkcar!

The data on our site has been adjusted for past corporate changes such as spin-offs. The spin-off of Option One mortgage by HRB in 2006 certainly affected the data we display here.

Sometimes the data such as ROE, ROC is also affected by the way you calculate it. For simplicity, our ROE is calculated by dividing the annual income by the shareholder equity at the fiscal year end. A more accurate way is probably dividing the annual income by the average shareholder equity within the fiscal year.

These two calculations will give different results, but they should be close.



Stocks Discussed: HRB,
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Re: Data Discrepencies
Posted by: jyorkcar (IP Logged)
Date: October 22, 2010 09:34PM

This helps clear things up a little, but I still feel confused about it all. I don't exactly understand what you mean by "spin-off." So, ROE can be calculated different ways and thus provide different values? This sure adds to complexity of analyzing stock. Would this simply be called a "margin of error?" These equations and respective outcomes ultimately effect my buying choices. So I guess I need to learn which is the "traditional" or "most accurate" way to compute whatever data.


Stocks Discussed: HRB,
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Re: Data Discrepencies
Posted by: TTrotter (IP Logged)
Date: May 9, 2013 03:13AM

I'm replying to an old post I know, but hope this helps someone.

Buffet uses the Equity at the beginning of the period to calculate ROE. A great article on this is at:

[www.aaii.com]

Cheers.


Stocks Discussed: HRB,
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