Today's Question of the Week comes from Omero in San Antonio, TX. It's an Investor Toolbox (Investools) question:
Q: Great book! I am currently using the Investor toolbox website and I can find all big five easily except for equity (BVPS) growth rates. I understand how to caluclate BVPS growth rates but I want to make sure I'm pulling the right data from the balance sheet. One the balance sheet, there are 3 totals at the bottom. the first is TOTAL LIABILITIES, the second is TOTAL EQUITY, and the third is TOTAL LIABILITIES & SHARE HOLDER'S EQUITY. The third total simply adds the first two. Which total should I use?
A: Use the Total Equity line to do the calculation. And then use the Rule of 72.
Phil Town is an investment advisor, hedge fund manager, 3x NY Times Best-Selling Author, ex-Grand Canyon river guide, and former Lieutenant in the US Army Special Forces. He and his wife, Melissa, share a passion for horses, polo, and eventing. Phil’s goal is to help you learn how to invest and achieve financial independence.