Files & Resources: youtube-breakingintowallstreet-com.s3.amazonaws.com/105-14-Key-Financial-Metrics-Ratios.xlsx youtube-breakingintowallstreet-com.s3.amazonaws.com/105-14-Key-Financial-Metrics-Ratios.pdf youtube-breakingintowallstreet-com.s3.amazonaws.com/105-14-Amazon-Financial-Statements.pdf youtube-breakingintowallstreet-com.s3.amazonaws.com/105-14-Salesforce-Financial-Statements.pdf youtube-breakingintowallstreet-com.s3.amazonaws.com/105-14-Walmart-Financial-Statements.pdf Table of Contents: 0:00 Introduction 1:15 Why Metrics and Ratios Matter 4:58 Return on Equity (ROE), Return on Assets (ROA), and Return on Invested Capital (ROIC) 10:50 Asset-Based and Turnover-Based Ratios 14:40 Interpretation of Key Metrics and Ratios for Wal-Mart, Amazon, and Salesforce 19:32 Why the Key Metrics and Ratios Are Sometimes Not That Useful
Really insightful and decent. I really like how you also give context as to how these metrics can be used meaningfully. Thank you for taking the time to make the video.
Sorry to be so offtopic but does any of you know of a trick to log back into an instagram account? I somehow forgot the login password. I would appreciate any help you can offer me
@Azariah Denver Thanks for your reply. I found the site on google and I'm trying it out atm. Looks like it's gonna take quite some time so I will get back to you later with my results.
Soumangue: Yes, we cover how to source and adjust the data in the lessons on this topic (for some reason RUclips is not allowing direct replies to your comments).
Brian, Thanks for the video! I have 2 questions - 1) Should we include notes payable in the calculation of invested capital? 2) Do we have to deduct cash when calculating the IC? (as Damodaran does)
1) If the notes payable are interest-bearing Debt, yes. 2) Yes, it's best to deduct Cash because Invested Capital pairs with Enterprise Value. But not all companies do it this way, so it's easiest to follow the company's own treatment in their financial statements in the absence of other instructions.
Great Video. I have a question here, though. Why have you excluded "Accounts Payable" when calculating Total debt for the ROIC? Isn't AP included in the Debt? Thanks
Thanks for the video! 6:12, definition: Why do we define ROA as NI / Assets? Since assets are funded by both equity and debt, shouldn't we use NOPAT (or EBIT or something that is before interest payment) as the numerator?
Assets are not funded by both Equity and Debt. *Core Business Assets* are funded by Equity, Debt, Preferred, and other investor groups. However, *all* Assets in the company are funded by Equity investors. This goes back to the definitions of Equity Value (Value of All Assets but only to Equity Investors) and Enterprise Value (Value of only Core-Business Assets, but to All Investors). Using NOPAT or EBIT with Total Assets would be inconsistent because Total Assets are only available to equity investors, but NOPAT and EBIT are available to all investors. If you wanted to use NOPAT or EBIT, you'd have to use Core Business Assets and subtract Cash, Investments, and anything else that is non-core to the company's main business.
Hey Brian, I'm from the UK and I didn't break into IB but I managed to get a summer internship at this UK pension fund that invests in infrastructure. I wanted to re-apply for summers and use the BIWS technical course over this summer after exams, but I was wondering whether my internship experience is relevant enough for IB to break in? I haven't heard much talk about pension funds on forums either
Direct investing internships at pension funds are usually good enough to be competitive for UK-based IB roles, but it depends on the rest of your background as well (easier if you go to a top university; maybe a bit more borderline at a semi-target or non-target university). Also, it depends on your timing and whether you're going for summer internships again (e.g., via a Master's program), off-cycles, or something else.
Mergers & Inquisitions / Breaking Into Wall Street Hi Brian, can you please adjust the volume of the intro and outro to match your volume when you speak? they are currently really loud as compared to your speaking voice on headphone and speakers
DreamCloudNine I'll see what we can do for future videos, but unfortunately RUclips does not allow you to re-upload videos without creating brand new ones, which is not an option here for a number of reasons. So if it too loud, you can turn down the volume or skip the intro.
Excellent video.Thanks, But I have one question on roic calculation. In Other Long-Term Funding Sources why you are not using Closing Cash and Bank Balance from cash flow in it?And do we use cash deposit from custumer while calculating roic of bank? And do we use Insurance Fund+ Catastrophic Reserve while calculating roic of Insurance company?
These metrics don't really apply in the same way to banks/insurance firms. ROIC doesn't even make sense because you can't calculate a metric like NOPAT for a bank or insurance firm, so you shouldn't be using it, as interest income is a critical part of their operations. Take a look at some of our sample lessons on banks/insurance firms for more on these topics.
The Quick Ratio is more conservative because it uses only the most liquid Current Assets that can be converted into cash in 90 days or less. So you will tend to get lower numbers with it, especially for companies with significant Inventory (since Inventory is in the Current Ratio but not the Quick Ratio).
Companies also publish Quarterly RoE , RoCE, etc. in their quarterly investor presentations which they release along with quarterly Earnings. My question is how do they calculate the Quarterly Denominator value ( Equity, Capital Employed, Invested Capital etc.) on which the quarterly returns are calculated? Do they take annual Denominator value (Invested Capital, Equity, Capital Employed etc.) and divide it by 4 to arrive at quarterly Invested capital, Equity , capital employed etc.?
Unfortunately, there's very little consistency. It's best to calculate the denominator based on the actual quarterly values, but you'll see a range of different approaches... especially outside the U.S., where half-year reports are more common than quarterly ones.
Hello, Excellent videos on FSA!! is it possible to share the excel file of different videos so that we can refer and do analysis with other companies too
If the Excel file for the video is available, you can click "Show More" and scroll to the bottom to get it. We don't have all the files in one place if that is what you are asking.
No. EBI is not the same as EBIT because EBIT is before taxes as well. EBI as a metric does not really make sense because, as you said, companies first pay interest and then pay taxes based on the amount after the interest deduction.
Thank you for the video! I just don't understand one thing, why don't we include current liabilities in capital employed? why is it that we only include interest-bearing debt but not non-interest bearing debt like accounts payable? what is the logic behind not including these current liabilities, because from what I understand, these current liabilities are a way of financing the current assets. So why include current assets but not include current liabilities? Thank you
Because short-term liabilities do not count as "capital." They're not raised from outside investors but rather come about as a result of day-to-day business operations, such as paying suppliers and collecting payments from customers. Capital Employed or Invested Capital does not include current assets, either - only funding sources.
This is a very small topic about which there is not much to say (and not everyone even agrees on how to calculate ROIC). There is some updated coverage on it if you look at the IFRS 16 video on the new lease accounting rules.
@@financialmodeling can I ask which way you guys prefer to calculate it? I am looking for a simple formula to efficiently compare and screen lots of companies. I am currently using Current Working Capital - Cash + Fixed Asset + Goodwill. Would really like to hear your opinion.
@@kidze73 Equity + Debt + Preferred Stock (or variations) is a better method. Invested Capital should be the book value of Enterprise Value or close to it.
Is there a way to calculate how much goes into expanding the business vs maintaining existing business operations? So if Amazon and Salesforce didn't expand their business, how much profit could they have retained.
I have seen companies whose current assets or liabilities (working capital items) are 10 times greater than the non current assets or liabilities (fixed assets, equity , Reserves, long term debt). Will the return ratios will still be applicable to these companies? And what's your view about such companies? Which ratio or financial metric will be best suited to judge these kind of companies where current items are 10-12 times bigger than non current items?
It's impossible to say without knowing the industry and company you are referring to. If the metrics are still in the range of the metrics for other, similar companies, they could still work. But it is true that certain metrics are not applicable for all types of companies, e.g., ROIC means little for a bank or insurance firm because you can't separate financial and operational activities.
They're less likely to come up in banking interviews, but could come up on the job and/or in equity research / asset management / hedge fund interviews.
Because Retained Earnings is a part of Invested Capital. "Invested Capital" means anything the company has generated internally (most components of Common SH Equity) as well as anything the company has raised externally from investors (Debt, Preferred Stock, other components of Common SH Equity, sometimes Operating Leases, etc.).
ROCE is not a valuation multiple. It's a way to evaluate the financial performance and operations of different companies, so it's not used as a direct valuation method. And it's not used for banks because ROE and ROTCE and other variations are more common as banks are all equity value-based.
They are similar, but some companies define them slightly differently... one example is that many companies capitalized operating leases for use in ROCE but did not do so in ROIC before the accounting rule changed in 2019. They are probably more similar metrics these days because companies often treat all leases as capital since they're now shown on the Balance Sheet.
Hi Brian, Regarding those earning based accounting ratio, I always wonder whether we shall deduct current period of earnings from equity before we do any calculation? Indeed, the ending balance of this period equity already includes this period of net profit. If we use net profit/average equity for ROE, Are we doubling net income as it has been included in both numerator and donominator. We are saying this period profit is partly generated by this period profit itself. Why we generally ignore the fact that Assets/Equity/Invested Capital has been inflated by profit?
It depends on what you are including in Equity... if you're excluding the Noncontrolling Interest or Preferred Stock, you should use metrics that subtract earnings or dividends from those sources. But if you're leaving in both of them, use just Net Income before those have been subtracted. Earnings from Equity Investments (Associate Companies) should always be included in Net Income when you're using it to form metrics like ROE and ROA because those earnings can go to all the common shareholders.
Great video. I have one question though: I have heard numerous times that ROIC must be compared to WACC (Cost of capital) to evaluate if a project/company is creating value. However, ROIC is a backward-looking accounting measure of return whereas WACC is forward-looking and based on market expectations (and D/E weights). Does it still make sense to compare the two? (Based on my understanding, IRR is also compared to WACC despite being based on future expectations and CFs instead of earnings). Thank you
ROIC is not necessarily backward-looking. You can calculate projected ROIC based on the company's projected NOPAT and Invested Capital, which you can track if you have a 3-statement model for the company. So both WACC and ROIC may be forward-looking, and you should compare the forward-looking versions of both of them.
Thanks for the response. And in which cases would we compare ROIC to WACC vs IRR to WACC. Are they simply different measures of return on investment? The fact that IRR accounts for the compounded average return across (potentially) multiple years whereas ROIC only accounts for a 1-year accounting return on capital is what confuses me the most.
IRR vs. WACC is more for long-term investments or acquisitions that you plan to hold and eventually sell or grow for the very long term. ROIC vs. WACC is more about assessing near-term performance as well as recent historical performance and assessing how a company is doing relative to its peers.
Great video! Which ratios do you think are the most important ones when picking stocks? I've found this article here www.stockmetrix.net/blog/post/070318/5-most-accurate-financial-ratios?t=gauYT#17d Do you agree with what they say there?
We don't agree with looking at any one metric or set of metrics to "pick stocks." To pick stocks, you must value the company based on your views and research, understand the market, identify catalysts and risk factors, set a target range, and figure out how to mitigate downside risk. It's more complex than just looking at 3 numbers and saying, "Invest!" Please see some of our stock pitches for examples of how to research companies and make recommendations.
![Working Capital and the Change in Working Capital in Valuation and Financial Modeling [REVISED]](http://i.ytimg.com/vi/tMgty8jwmHI/mqdefault.jpg)
![Working Capital and the Change in Working Capital in Valuation and Financial Modeling [REVISED]](/img/tr.png)
Files & Resources:
youtube-breakingintowallstreet-com.s3.amazonaws.com/105-14-Key-Financial-Metrics-Ratios.xlsx
youtube-breakingintowallstreet-com.s3.amazonaws.com/105-14-Key-Financial-Metrics-Ratios.pdf
youtube-breakingintowallstreet-com.s3.amazonaws.com/105-14-Amazon-Financial-Statements.pdf
youtube-breakingintowallstreet-com.s3.amazonaws.com/105-14-Salesforce-Financial-Statements.pdf
youtube-breakingintowallstreet-com.s3.amazonaws.com/105-14-Walmart-Financial-Statements.pdf
Table of Contents:
0:00 Introduction
1:15 Why Metrics and Ratios Matter
4:58 Return on Equity (ROE), Return on Assets (ROA), and Return on Invested Capital (ROIC)
10:50 Asset-Based and Turnover-Based Ratios
14:40 Interpretation of Key Metrics and Ratios for Wal-Mart, Amazon, and Salesforce
19:32 Why the Key Metrics and Ratios Are Sometimes Not That Useful
Really insightful and decent. I really like how you also give context as to how these metrics can be used meaningfully. Thank you for taking the time to make the video.
Thanks for watching!
Very clear and neat presentation. Thank You. It shows the depth of your knowledge. Hats off.
+Sudatta Bharati Thanks for watching!
Sorry to be so offtopic but does any of you know of a trick to log back into an instagram account?
I somehow forgot the login password. I would appreciate any help you can offer me
@Thatcher Collin instablaster :)
@Azariah Denver Thanks for your reply. I found the site on google and I'm trying it out atm.
Looks like it's gonna take quite some time so I will get back to you later with my results.
@Azariah Denver it worked and I now got access to my account again. I am so happy:D
Thanks so much you really help me out!
Brian - Do you go over in your training on how you source the data and how you scrub the data before you compute these metrics & ratios?
Soumangue: Yes, we cover how to source and adjust the data in the lessons on this topic (for some reason RUclips is not allowing direct replies to your comments).
Excel File unable to open.
Very insightful video. Thanks for knowledge.
Please see: youtube-breakingintowallstreet-com.s3.us-east-1.amazonaws.com/105-14-Key-Financial-Metrics-Ratios.xlsx
Brian, Thanks for the video!
I have 2 questions -
1) Should we include notes payable in the calculation of invested capital?
2) Do we have to deduct cash when calculating the IC? (as Damodaran does)
1) If the notes payable are interest-bearing Debt, yes. 2) Yes, it's best to deduct Cash because Invested Capital pairs with Enterprise Value. But not all companies do it this way, so it's easiest to follow the company's own treatment in their financial statements in the absence of other instructions.
Woah guys! Love your videos andand dedication!
Thanks for watching!
good video :)
Thanks for watching!
Great Video. I have a question here, though. Why have you excluded "Accounts Payable" when calculating Total debt for the ROIC? Isn't AP included in the Debt? Thanks
No, only interest-bearing liabilities are included. Accounts Payable is non-interest-bearing.
Thanks for the video!
6:12, definition:
Why do we define ROA as NI / Assets? Since assets are funded by both equity and debt, shouldn't we use NOPAT (or EBIT or something that is before interest payment) as the numerator?
Assets are not funded by both Equity and Debt. *Core Business Assets* are funded by Equity, Debt, Preferred, and other investor groups. However, *all* Assets in the company are funded by Equity investors.
This goes back to the definitions of Equity Value (Value of All Assets but only to Equity Investors) and Enterprise Value (Value of only Core-Business Assets, but to All Investors).
Using NOPAT or EBIT with Total Assets would be inconsistent because Total Assets are only available to equity investors, but NOPAT and EBIT are available to all investors.
If you wanted to use NOPAT or EBIT, you'd have to use Core Business Assets and subtract Cash, Investments, and anything else that is non-core to the company's main business.
Hey Brian, I'm from the UK and I didn't break into IB but I managed to get a summer internship at this UK pension fund that invests in infrastructure. I wanted to re-apply for summers and use the BIWS technical course over this summer after exams, but I was wondering whether my internship experience is relevant enough for IB to break in? I haven't heard much talk about pension funds on forums either
Direct investing internships at pension funds are usually good enough to be competitive for UK-based IB roles, but it depends on the rest of your background as well (easier if you go to a top university; maybe a bit more borderline at a semi-target or non-target university). Also, it depends on your timing and whether you're going for summer internships again (e.g., via a Master's program), off-cycles, or something else.
Mergers & Inquisitions / Breaking Into Wall Street
Hi Brian, can you please adjust the volume of the intro and outro to match your volume when you speak? they are currently really loud as compared to your speaking voice on headphone and speakers
DreamCloudNine I'll see what we can do for future videos, but unfortunately RUclips does not allow you to re-upload videos without creating brand new ones, which is not an option here for a number of reasons. So if it too loud, you can turn down the volume or skip the intro.
Sehr gutes Video! Danke für alles!
Thanks for watching!
Excellent video.Thanks, But I have one question on roic calculation. In Other Long-Term Funding Sources why you are not using Closing Cash and Bank Balance from cash flow in it?And do we use cash deposit from custumer while calculating roic of bank? And do we use Insurance Fund+ Catastrophic Reserve while calculating roic of Insurance company?
These metrics don't really apply in the same way to banks/insurance firms. ROIC doesn't even make sense because you can't calculate a metric like NOPAT for a bank or insurance firm, so you shouldn't be using it, as interest income is a critical part of their operations. Take a look at some of our sample lessons on banks/insurance firms for more on these topics.
Thank you for your presentation
Just a quick question:
Do the difference between current ratio and quick ratio mean anything in reality?
The Quick Ratio is more conservative because it uses only the most liquid Current Assets that can be converted into cash in 90 days or less. So you will tend to get lower numbers with it, especially for companies with significant Inventory (since Inventory is in the Current Ratio but not the Quick Ratio).
Mergers & Inquisitions / Breaking Into Wall Street
Thank you that helps
Excellent video, thanks so much for posting!
Great critical thinking video
Thanks for watching!
Companies also publish Quarterly RoE , RoCE, etc. in their quarterly investor presentations which they release along with quarterly Earnings.
My question is how do they calculate the Quarterly Denominator value ( Equity, Capital Employed, Invested Capital etc.) on which the quarterly returns are calculated? Do they take annual Denominator value (Invested Capital, Equity, Capital Employed etc.) and divide it by 4 to arrive at quarterly Invested capital, Equity , capital employed etc.?
Unfortunately, there's very little consistency. It's best to calculate the denominator based on the actual quarterly values, but you'll see a range of different approaches... especially outside the U.S., where half-year reports are more common than quarterly ones.
Hello, Excellent videos on FSA!! is it possible to share the excel file of different videos so that we can refer and do analysis with other companies too
If the Excel file for the video is available, you can click "Show More" and scroll to the bottom to get it. We don't have all the files in one place if that is what you are asking.
is 7:00 basically EBI (earnings before Interest)? Or do you not say that because usually interest is paid first and only then you deduct taxes?
No. EBI is not the same as EBIT because EBIT is before taxes as well. EBI as a metric does not really make sense because, as you said, companies first pay interest and then pay taxes based on the amount after the interest deduction.
Thank you for the video! I just don't understand one thing, why don't we include current liabilities in capital employed? why is it that we only include interest-bearing debt but not non-interest bearing debt like accounts payable? what is the logic behind not including these current liabilities, because from what I understand, these current liabilities are a way of financing the current assets. So why include current assets but not include current liabilities? Thank you
Because short-term liabilities do not count as "capital." They're not raised from outside investors but rather come about as a result of day-to-day business operations, such as paying suppliers and collecting payments from customers. Capital Employed or Invested Capital does not include current assets, either - only funding sources.
Should we add Accrued Expenses or SG&A all the time to the COGS when calculating AP Turnover?
No, not necessarily. It depends on the company and what it includes in those items.
can you guys make available the excel spreasheet used in this explanation? great video. tks
Click "Show More." Scroll to the bottom. Click the links there.
Hi, please do a deep dive on ROIC and how to accurately measure them thanks
This is a very small topic about which there is not much to say (and not everyone even agrees on how to calculate ROIC). There is some updated coverage on it if you look at the IFRS 16 video on the new lease accounting rules.
@@financialmodeling can I ask which way you guys prefer to calculate it? I am looking for a simple formula to efficiently compare and screen lots of companies. I am currently using Current Working Capital - Cash + Fixed Asset + Goodwill. Would really like to hear your opinion.
@@kidze73 Equity + Debt + Preferred Stock (or variations) is a better method. Invested Capital should be the book value of Enterprise Value or close to it.
Is there a way to calculate how much goes into expanding the business vs maintaining existing business operations? So if Amazon and Salesforce didn't expand their business, how much profit could they have retained.
No, not unless the company tells you explicitly.
I have seen companies whose current assets or liabilities (working capital items) are 10 times greater than the non current assets or liabilities (fixed assets, equity , Reserves, long term debt). Will the return ratios will still be applicable to these companies?
And what's your view about such companies? Which ratio or financial metric will be best suited to judge these kind of companies where current items are 10-12 times bigger than non current items?
It's impossible to say without knowing the industry and company you are referring to. If the metrics are still in the range of the metrics for other, similar companies, they could still work. But it is true that certain metrics are not applicable for all types of companies, e.g., ROIC means little for a bank or insurance firm because you can't separate financial and operational activities.
thanks for the vid! any idea if these metrics show up in banking interviews? Thanks
They're less likely to come up in banking interviews, but could come up on the job and/or in equity research / asset management / hedge fund interviews.
Mergers & Inquisitions / Breaking Into Wall Street I
For the ROIC calculation, are you including Retained Earnings in Invested Capital / what is the logic for that?
Because Retained Earnings is a part of Invested Capital. "Invested Capital" means anything the company has generated internally (most components of Common SH Equity) as well as anything the company has raised externally from investors (Debt, Preferred Stock, other components of Common SH Equity, sometimes Operating Leases, etc.).
it's Helpful, Thankyou :)
great tutorial ...if you please share the excels used in the video .thanks
jatinder singh Please click "Show More" and then scroll to Resources at the bottom.
Mergers & Inquisitions / Breaking Into Wall Street Perfect , thank you so much .. you made my day .
Is ROCE valid for banking & financial stocks? If not, then why?
ROCE is not a valuation multiple. It's a way to evaluate the financial performance and operations of different companies, so it's not used as a direct valuation method. And it's not used for banks because ROE and ROTCE and other variations are more common as banks are all equity value-based.
Where can we download the excel sheet shown in this video?
Click "More" or "Show More" under the video and scroll to the links.
IM a bit late but, so ROIC= ROCE? if not whats the difference
They are similar, but some companies define them slightly differently... one example is that many companies capitalized operating leases for use in ROCE but did not do so in ROIC before the accounting rule changed in 2019. They are probably more similar metrics these days because companies often treat all leases as capital since they're now shown on the Balance Sheet.
Hi Brian,
Regarding those earning based accounting ratio, I always wonder whether we shall deduct current period of earnings from equity before we do any calculation? Indeed, the ending balance of this period equity already includes this period of net profit.
If we use net profit/average equity for ROE, Are we doubling net income as it has been included in both numerator and donominator. We are saying this period profit is partly generated by this period profit itself.
Why we generally ignore the fact that Assets/Equity/Invested Capital has been inflated by profit?
It depends on what you are including in Equity... if you're excluding the Noncontrolling Interest or Preferred Stock, you should use metrics that subtract earnings or dividends from those sources. But if you're leaving in both of them, use just Net Income before those have been subtracted. Earnings from Equity Investments (Associate Companies) should always be included in Net Income when you're using it to form metrics like ROE and ROA because those earnings can go to all the common shareholders.
Great video. I have one question though: I have heard numerous times that ROIC must be compared to WACC (Cost of capital) to evaluate if a project/company is creating value. However, ROIC is a backward-looking accounting measure of return whereas WACC is forward-looking and based on market expectations (and D/E weights). Does it still make sense to compare the two? (Based on my understanding, IRR is also compared to WACC despite being based on future expectations and CFs instead of earnings).
Thank you
ROIC is not necessarily backward-looking. You can calculate projected ROIC based on the company's projected NOPAT and Invested Capital, which you can track if you have a 3-statement model for the company. So both WACC and ROIC may be forward-looking, and you should compare the forward-looking versions of both of them.
Thanks for the response. And in which cases would we compare ROIC to WACC vs IRR to WACC. Are they simply different measures of return on investment? The fact that IRR accounts for the compounded average return across (potentially) multiple years whereas ROIC only accounts for a 1-year accounting return on capital is what confuses me the most.
IRR vs. WACC is more for long-term investments or acquisitions that you plan to hold and eventually sell or grow for the very long term. ROIC vs. WACC is more about assessing near-term performance as well as recent historical performance and assessing how a company is doing relative to its peers.
Perfect, thanks again!
anyone can share the excel spreadsheet with me please?
Click "More" and scroll to the links at the bottom.
Great video! Which ratios do you think are the most important ones when picking stocks? I've found this article here www.stockmetrix.net/blog/post/070318/5-most-accurate-financial-ratios?t=gauYT#17d Do you agree with what they say there?
We don't agree with looking at any one metric or set of metrics to "pick stocks." To pick stocks, you must value the company based on your views and research, understand the market, identify catalysts and risk factors, set a target range, and figure out how to mitigate downside risk. It's more complex than just looking at 3 numbers and saying, "Invest!" Please see some of our stock pitches for examples of how to research companies and make recommendations.
Literally copied and stole your excel sheet
Glad to hear it was useful!
Thank you for your presentation
Just a quick question:
Do the difference between current ratio and quick ratio mean anything in reality?
In quick ratio we remove the effect of inventory. As inventory cannot be converted into cash quickly for its fair value.