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% Diff formula in portfolio defense report
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I have noticed the % Diff column in the portfolio defense report and was trying to understand the mechanics of it. Can you give me the formula on how to calculate this and how to interpret the findings?
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Rank: Administration
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Hello,
The number on the top row of the % Chg cell should be the percentage change of the most recent quarter to the year-ago quarter.
The number on the bottom row of the % Chg cell should be the percentage change of the next-to-most recent quarter to its year-ago quarter. (if the top row is Q2 2022 compared to Q2 2021, then the bottom row is Q1 2022 compared to Q1 2021.)
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Rank: Advanced Member
Posts: 67
Thanks: 13 times Was thanked: 6 time(s) in 6 post(s)
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Thanks for the explanation. Can you give a math example and the interpretation on how to use the results.
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Rank: Administration
Posts: 258
Thanks: 4 times Was thanked: 11 time(s) in 11 post(s)
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Sure, it's using relatively standard percentage calculations. I think what makes the % Difference column a little bit tricky, is that it's looking at two different percentages, and then calculating a percent difference between those two.
Using Apple because they're fairly popular: Their EPS for the most recent quarter is 1.2 , and the EPS for the same quarter a year ago was 1.2 , that's a -7.69% change. The report rounds to -7.7 in the % Change EPS column on the top row.
The % Difference column then looks at my estimated growth figure on the stock study. Let's say I estimated a 11% growth on the front page of my SSG.
((-7.69 - 11) / 11) = -1.699 which is -169.9% That -169.9 shows up in the top row of the % Difference column, for my Apple stock.
As far as making use of that, it's primarily a way to check your future estimation vs. some relatively recent performance by the company.
There's no suggested percentage to shoot for, but you'd generally like to see a positive number, because it shows the company's recent performance is at least as good as your estimation.
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% Diff formula in portfolio defense report
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