6 Comments

Hey man, i love this video, thanks for writing this out!

With the 'deployed capital', isn't there $300m of working capital, subtract $100m cash at end of quarter, plus $100m of PPE? So deployed capital of $300m, not $200m?

Can't get my head around this after watching the vid a bunch of times

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Wait on further thoughts, it seems 'liquid assets' ignores the $100m left in inventory after turning $100m into cash.

And also 'deployed capital' doesnt include inventory too.

I wonder why this isn't included in the deployed capital??

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Deployed Capital Calculation:

Working Capital (excluding cash): $285.9m - $19.3m cash = $266.6m

Property, Plant & Equipment (PP&E): $100m

Deployed Capital = Working Capital (ex-cash) + PP&E

= $266.6m + $100m

= $366.6m

If we calculate it with 100m in cash and use a discount on the inventory, we would have a total of deployed capital of 286.6m.

Li Lu kept it super simple, so that everyone could follow on the spot during the lesson. It is too hard to follow otherwise - but it gets afterwards

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Thank you for such a great post. Really thought provoking.

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Glad that you enjoy it

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Where do you find the numbers he recalls on the tables? I don't really seem them :/

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