How to Value a Stock Step 2: Invested Capital
This is the second article in a four part series that will walk readers through how to rate and value a stock. For this article, we will continue to walk you through the process of valuing chemical manufacturer DuPont (DD), which we began by calculating NOPAT. The second step to gauge the value of a company is to determine the sum of all cash that has been invested in a company over its life without regard to financing form or accounting name. We call this Invested Capital.
Step 3 can be found here. To learn more about the adjustments we make to calculate Invested Capital, visit our Accounting Loopholes section.