⚡ Real Economic Profit Analyzer

Core Metrics

Real Economic Profit (REP)
What a company actually earns in cash after accounting for true stock dilution, real asset maintenance, and one-time charges.
= CFO − Real SBC − Maintenance CapEx − Restructuring + Investment Income

Real Cash Yield
Real Economic Profit ÷ Enterprise Value. Your real cash return on the market price. Above 7% = strong, 4–7% = fair, 2–4% = growth priced in, below 2% = expensive.

Real ROIC
Real Economic Profit ÷ Invested Capital. How efficiently the company uses deployed capital. Above 12% is strong; below 6% is concerning.

Full D&A vs. All Amortization Added Back Views
Full D&A: Full D&A × 1.05 as maintenance CapEx — treats all depreciation and amortization as real replacement cost. Penalizes acquisitive companies, which may be appropriate.
All Amortization Added Back: Depreciation Only × 1.05, excluding intangible amortization from acquisitions. Amortization of acquired intangibles may not be a real cash cost — the assets often retain value even as they amortize to zero on the books.

Real SBC Burden
MAX of SBC Expense (cash flow statement) or SBC Grant Date Fair Value (units granted × grant price). Captures true dilution cost — the accounting expense often understates the economic value transferred to employees.

Return on NTA
Real Profit ÷ Net Tangible Assets (Total Assets − Goodwill − Intangibles − Cash − STI). Strips out acquisition premiums and buyback-compressed equity. Useful for comparing companies with different M&A and capital return histories.

Real P/E
Share Price ÷ Real Economic Profit per share. Alternative to traditional P/E using real profit instead of reported earnings.

Pre-Debt Yield (unlevered)
(Real Profit + Interest Paid) ÷ Enterprise Value. Yield as if the company had no debt — useful for cross-company comparison.

Real vs. Reported Gap
Real Economic Profit minus Reported FCF (CFO − Total CapEx). Negative = reported FCF overstates real earnings, typically because SBC dilution isn't deducted in traditional FCF.

v3.2 Metrics

Three-Tier Yield
Three earnings yields shown in descending order: (1) Wall Street Earnings Yield = Net Income ÷ Market Cap — what reported earnings look like. (2) Real Earnings Yield = REP per share ÷ Price — cleaned-up earnings per share. (3) Real Ownership Yield = REP ÷ EV — what you'd earn buying the whole company.

REP Per Share
Real Economic Profit ÷ Diluted Shares Outstanding. The per-share equivalent of REP, analogous to EPS but using real profit instead of reported net income.

SBC Value Gap
SBC Grant Date Fair Value ÷ SBC Expense. How much the income statement understates true compensation cost. ≤1.2 = fair, 1.2–1.5 = moderate gap, >1.5 = significant hidden dilution (red flag).

Dep/NTA Ratio
Depreciation ÷ Net Tangible Assets. Proxy for capital intensity. >15% = high intensity (Full D&A view more reliable), 8–15% = mixed, <8% = low intensity. Lease-heavy companies may show elevated ratios due to ROU asset depreciation.

Value Leakage
SBC Growth ÷ CFO Growth (year-over-year). Shows what fraction of cash flow improvement was absorbed by rising compensation vs. flowing to shareholders. <20% = good, 20–50% = meaningful, >50% = majority of growth consumed by SBC.

Target Price Calculator
Inverts the yield equation: Target EV = REP ÷ Target Yield → Target Market Cap = Target EV − Debt + Cash → Target Price = Target Market Cap ÷ Shares. Shows what price you need for the yield you want.

Capital & Growth

Invested Capital (IC)
Equity + Total Debt − Cash − STI. Total capital deployed from equity and debt holders, net of liquid assets.

Net Tangible Assets (NTA)
Total Assets − Goodwill − Intangibles − Cash − STI. Physical and working capital in operations, excluding acquisition paper assets.

Enterprise Value (EV)
Market Cap + Total Debt − Cash − STI. Total price to acquire the entire business including debt, net of cash.

Growth CapEx
Total CapEx − Maintenance CapEx. Investment in future growth beyond maintaining current capacity.

Maintenance CapEx
Annual cash needed to maintain current productive capacity. Auto-estimated as D&A × 1.05 (Full D&A) or Depreciation Only × 1.05 (All Amort Added Back) when not disclosed by the company. The × 1.05 is an inflation adjustment — replacing aging assets costs more today.

Reinvestment Rate
Growth CapEx ÷ Invested Capital. Fraction of capital being redeployed into growth.

Implied Profit Growth
Reinvestment Rate × Real ROIC. Organic growth rate assuming reinvested capital earns current returns.

Incremental Return
Year-over-year Δ Real Profit ÷ prior year Growth CapEx. What each dollar of growth spending actually produced.

Input Fields

CFO — Cash From Operations. Net cash from operating activities (cash flow statement).

SBC Expense Addback — Stock-based compensation added back in CFO section. Non-cash charge.

SBC Grant Date Fair Value — Units granted × weighted-average grant price. From SBC footnote.

D&A — Depreciation & Amortization combined. From cash flow adjustments.

Depreciation Only — Physical depreciation of PP&E, excluding intangible amortization. Enables All Amortization Added Back view.

Amortization — D&A minus Depreciation. Acquisition-related intangible write-down. An accounting convention — acquired assets often retain or grow in value even as they amortize to zero on the books.

STI — Short-Term Investments. Current marketable securities, treated like cash.

Interest Paid — Cash interest from supplemental disclosures (bottom of cash flow statement).

Income Tax Paid — Cash taxes from supplemental disclosures. Often very different from tax provision.

Profit-Capital Base Analysis (Multi-Year)

Profit Change / Profit CAGR — Single-period change or Compound Annual Growth Rate of Real Profit (CAGR shown when 3+ periods available).

Capital Change / Capital CAGR — Single-period change or Compound Annual Growth Rate of Invested Capital.

Growth Intensity — Total CapEx / Maintenance CapEx. Measures how much spending exceeds what's needed to maintain the existing base. 1.5x+ = high growth investment.

Five Patterns — Compounding (profit growing ≥ capital, green), Active Investment (profit growing but lagging capital, high intensity, blue), Investment Overhang (profit declining, high intensity, amber), Productivity Gap (profit growing but lagging capital, low intensity, amber), Deteriorating Base (profit declining, low intensity, red).

Yield-on-Cost Trajectory

Yield-on-Cost — Real Economic Profit ÷ Purchase Enterprise Value. Unlike current yield (which uses today's market price), this uses your actual cost basis as the fixed denominator. Shows how your real cash return grows over time as the business compounds.

ROIIC — Return on Incremental Invested Capital. The return each dollar of growth CapEx earns. Each year's growth CapEx is assumed to earn this rate, and returns accumulate (Year 1 CapEx keeps earning in Year 2, 3, etc.).

Organic Growth (decelerating) — Annual profit improvement from the existing asset base (pricing power, margin expansion, efficiency). Starts at a user-specified rate and decays toward a terminal rate, reflecting the reality that margins can't expand forever.

Decay Speed — How quickly organic growth decelerates from the initial rate to the terminal rate. Slow = gradual multi-year fade. Fast = organic gains compress quickly.

From Growth CapEx — Cumulative new profit generated by all prior years' growth investments earning the ROIIC rate.

Organic Gain — Cumulative profit growth from the existing base becoming more productive, net of deceleration.

Cash Deployment Scenario

% of Cash+STI Deployed — What fraction of the company's liquid assets (cash + short-term investments) gets converted into productive operating assets or acquisitions.

Incremental Return Above Current — The additional return deployed capital earns above what it currently generates. Set to 0% to see the pure EV impact of reclassifying cash as operating capital (the "cash as operating entity" view).

Key dynamic — Deploying cash increases REP (more income) but also increases EV (cash no longer subtracted). The yield only improves when incremental returns are high enough to outpace the EV denominator growth.

Growth Compounder

Reinvestment Rate (% of REP) — How much Real Economic Profit gets reinvested in growth. Auto-populated from actual Growth CapEx / REP. The remainder is available for dividends, buybacks, or cash accumulation.

ROIIC — Return on Reinvestment — The return each dollar of reinvestment earns at full productivity. 6–8% = average, 12–15% = excellent, 20%+ = exceptional (requires justification).

Payback Lag — Years before reinvested capital reaches full return. Returns ramp linearly from 0 to full ROIIC over the lag period. Software = 0–1 years, consumer = 1–2, industrial = 2–4, infrastructure/utility = 4–7.

Implied REP Growth — Reinvestment Rate × ROIIC. The steady-state annual growth rate of Real Economic Profit, before considering the payback lag. With lag, actual early-year growth is slower but accelerates as investments mature.

Capital Returns

Share Repurchases — Total cash spent on share buybacks in a fiscal year ($M). Sourced from the financing activities section of the cash flow statement. Uses the CFS line (includes excise tax = actual cash out the door), not Note 10.

Buyback Shares — Total shares repurchased/retired in a fiscal year, in millions. Sourced from the share repurchase footnote or Item 5 table. Not the same as treasury stock changes (which include shares withheld for RSU tax).

Dividends Paid — Total cash dividends paid in a fiscal year ($M). From the financing activities section of the CFS.

Total Capital Returned — Share Repurchases + Dividends Paid. Total cash distributed to shareholders.

Buyback Return Tracker — Shows cumulative buybacks, dividends, and total capital returned over time. Includes net share count change (buybacks vs. SBC dilution) and SBC offset ratio.

Buyback ROI Analysis — Evaluates whether buybacks created or destroyed value. For each year's buybacks, computes: ownership % captured (shares retired ÷ diluted shares), average price paid, and yield on cost (what those repurchased shares earn at current REP levels). The vintage table shows each year's buyback cohort; the yield matrix shows how yields evolve over time. Only appears for annual periods (TTM/interim excluded).

Captured Yield — (Ownership % × Current REP) ÷ Buyback Cost. What return the company is earning today on each vintage of buyback spending. Higher = better capital allocation. Compare against T-bill rates to assess whether buybacks beat risk-free alternatives.

Buyback Vintage Yield Matrix — Cross-reference table showing each buyback year's captured yield evaluated at each subsequent year's REP. Shows how the yield on a given year's buybacks evolves as REP grows or shrinks. Trimmed to exclude years with no buyback activity at the edges.

Look-Through REP

Look-Through Real Economic Profit — For companies with significant equity investment portfolios (e.g., Berkshire Hathaway), standard REP only captures dividends received from investees (which flow through CFO). Look-Through REP adds the after-tax retained earnings of those portfolio companies — profits earned on behalf of shareholders that compound inside investee businesses without appearing in CFO. Methodology: portfolio market value × (earnings yield − dividend yield) × 0.97 tax haircut, added to standard REP. Manually supplied — cannot be extracted from 10-K filings.

Look-Through Yield — Look-Through REP ÷ Enterprise Value. The more complete yield measure for companies whose equity portfolios generate significant unreported earnings power. Shown in a blue-bordered card below the standard yield ladder when Look-Through REP data is present.

Yield Pickup — Look-Through REP minus standard REP. The additional earning power from portfolio investee retained earnings not captured by CFO-based analysis.

Data Pipeline

10-K — SEC annual report. Primary source for all cash flow items and full-year financials.

10-Q — SEC quarterly report. Used to update balance sheet with more current data.

Gemini Extraction — Google Gemini processes full filing PDFs and returns structured JSON via standardized prompt.

Claude Audit — Cross-checks Gemini extraction against computed results, explains findings, identifies risks.