Originally Posted by
Snoopy
There is something rather strange about the above two tabulated results. Both are what I would loosely term 'Earnings Metrics'. But one shows that Heartland (just) has the upper hand, while the other is a 'clear win' to Turners. How can this be?
One thing that could explain this result is that the first statistic is based on 'Net Profit After Tax', while the second is based on 'Earnings Before Interest and Tax'. So maybe if I remove the interest and tax from the second statistic, and assume that Turners finance pays their full whack of tax, the two results should align? Let's see:
EBIT /(Loan Book {averaged}) to
NPAT /(Loan Book {averaged})
Heartland:
($260.488m-$68.403m)-($126.041m+$16.172m)/ [(1/2)*($2,862.070m+$2,607.393m)] = 1.8%
Turners (Finance Only) (annualised):
2x [($5.901m-$0.046m)-$4.008m] x0.72 / [(1/2)*($164.436m+$142.827m)] = 5.5%
Oh dear that didn't go well! The discrepancy is even greater now! I will have to rethink things - again!