Beyond the stock price.
Inside the business.
Five research lenses. Four calculators and a research checklist. A more rigorous way to examine business quality, cash generation and the price of ownership.
Return on invested capital
Does growth create value?
ROIC compares after-tax operating profit with capital employed in operations. Compare it with an assumed cost of capital, using consistent definitions and a representative period.
This model estimates NOPAT as EBIT × (1 − operating tax rate), then divides by average invested capital. Definitions and tax adjustments vary; compare consistently across a cycle.
Reference: View source ↗
Compare after-tax operating return with the assumed cost of capital.
Free cash flow
Where did the cash go?
Operating cash flow less capital expenditure is a useful starting point. Examine working capital, stock compensation, maintenance spending and recurring obligations.
This common FCF measure is not automatically cash distributable to owners or unlevered cash flow to the firm. Financing, acquisitions and stock compensation need separate analysis.
Reference: View source ↗
This simplified free cash flow calculation excludes acquisitions and financing flows.
Reverse valuation
What must go right?
Instead of predicting the future share price, reverse the question: what future cash generation is required to justify the price being paid?
Unlevered free cash flow to the firm (FCFF) is discounted at the weighted-average cost of capital (WACC). Enterprise value equals equity value plus net debt here; other non-operating assets and claims are excluded. Stable growth is assumed immediately, making this a sensitivity model rather than a complete valuation.
Reference: View source ↗
Hypothetical values in one currency. WACC must exceed growth. Compare the cash flow required by the price with your current FCFF assumption; neither output is a price target.
Shareholder dilution
Growth is not the same as per-share growth.
New shares can spread the value of a business across more owners. Buybacks can reverse dilution, but their price and financing matter.
Reported EPS requires the applicable income measure and weighted-average share count; diluted EPS applies additional rules. This explorer uses fixed income and two hypothetical share counts, so it is not a reported diluted EPS calculation. Potential shares that reduce a reported loss per share can be excluded under antidilution rules.
Reference: View source ↗
Assumes unchanged net income and compares two hypothetical share counts.
Moat durability
Can competitors erode the advantage?
Network effects, switching costs, intangible assets, cost advantage and efficient scale are hypotheses to test—not permanent labels.
Qualitative scorecards are analytical prompts, not official Morningstar ratings or forecasts.
Study the 15-company Economic Moat Atlas →
Reference: View source ↗
Use this checklist to frame research, not to declare a wide moat.
Examples are hypothetical. References checked 14 November 2026. Financial definitions depend on reporting standards and the business being analysed.
A great business is not automatically a great investment.
Separate business quality, reinvestment opportunities, financial risk and the valuation paid. The models above are educational, hypothetical and not recommendations.
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