Magic Formula score

Joel Greenblatt's rank-by-cheapness-and-quality composite (EBIT yield × return on capital).

EBIT — TTM ($)

Enterprise value ($)

Net working capital ($)

Net fixed assets ($)

Magic Formula read

Mixed

EBIT yield

10.0%

Greenblatt floor: 10%

Return on capital

50.0%

Greenblatt floor: 25%

Greenblatt's actual recipe is to rank an entire universe on both metrics, sum the ranks, and pick the lowest combined ranks. This single-stock check is a sanity test, not the full method.

Formula

EBIT yield = EBIT / Enterprise Value; Return on Capital = EBIT / (Net Working Capital + Net Fixed Assets). The ranking version (used by the screener) sorts the universe by each metric, then by combined rank.

Illustrative only. Calculator outputs assume constant inputs and ignore taxes, fees, inflation, and market volatility unless stated. For research and educational purposes only — not financial advice.