Couldn't have imagined ever, That one co doing 1.5x asset turns on a greenfield plant will do 15x asset turns with debottlenecking the capacity. Appreciation of ratios increases when business understanding improves
Just finished recording the Working capital session and discussed 4 businesses with reduction in WC: Multiple second-order consequences
WC Reduction=Lighter Balance sheet=Lesser capital employed=Higher ROCE=Higher OCF=Eventually Higher Free cash flow=Improved perception
More from Intrinsic Compounding
Sequent will teach many people about what Hyperbolic Discounting and Myopic Loss aversion means. 2 Mental models which an equity investor has to understand about. No other way. Disc: invested, not a reco
Having multiple facilities accredited with certifications from the best authorities from globe is a hidden moat in itself... 10-20% pop and then retracement should not shake confidence... Business focus and longevity should build conviction
— Harinder S Nanda (@harindersnanda) July 14, 2021
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