Winmark's 'High' Book Value Caused By Economic Goodwill
Unconventional Capital Wisdom • Tue, Aug. 19
- Standard accounting is misleading with companies that earn high returns on very little net-tangible assets.
- Economic Goodwill is real and is hard to quantify but estimates using market rates gives a ball-park idea of a company's true net asset value.
- Winmark does not trade at 20x book, but 1.6x including Economic Goodwill. Historically, that is a lower multiple to pay for the company.