fbpx

The Villages

Dear Mr. Berko: I’m 78, and my spouse is 80. We bowl, play golf and bridge together, and I’ve become a decent tennis player since moving to the Villages from another development in Florida. This been wonderful place to live for years and, now it’s just an OK place to be. It seems that pushy, loud Northerners who move here lack decorum and good manners, which is forcing some older residents out, and that may include us. We heard that you moderated two investment forums at Top of the World recently and know some people there. So, what do you think of Kenneth Colen’s Top of the World near Ocala, Florida? We’ve visited several times and it’s very pleasant and low-key.

And, finally, can you explain the following financial terms? I don’t understand them, but you use them quite a bit: (1) net profit margin, (2) price-earnings ratio and (3) book value. We have a fair portfolio of stocks (enclosed) and because we trust you, we hope that you would give us some ideas to improve our income and growth. Please don’t use our real initials because people we know read your column. — XX, Villages, Fla.

Dear XX: The price-earnings ratio (P/E) is a metric that values a public company’s stock relative to its current earnings per share. This number is derived by dividing the current price of a stock by its per-share earnings. For instance, if ISKHA Corporation was trading at $30 and had share earnings of $3.00, then ISKHA would trade at a P/E ratio of 10. Basically, you would have to pay $30 to buy $3.00 of earnings. The significance of the P/E is a comparison with other public companies in the same business. If the P/E deviates strongly from the P/E of the group as a whole, you’ll want to know if this is good news or bad news.

Book value is the measure of a company’s net assets after subtracting its debts. If BIBBLE Corporation has $5.0 million in assets (land, building, equipment, patents, inventory, cash) and $2.0 million in debts (accounts payable, taxes, rents, lease payments) the book value is $3 million. Simple as Simone. After selling all of BIBBLE’s assets for $5 million and paying off all of BIBBLE’S debts of $2.0 million, the remaining $3 million is considered the book value. So, if there are one million BIBBLE shares outstanding, each of those shares is entitled to receive $3.00 in cash if the company liquidates. And as an investor, you would want to know how BIBBLE’s book value compares to others in the industry.

Net profit margin (expressed as a percentage) is the ratio of net profits to total revenues. In my world, this metric is one of the best yardsticks to identify the success or skill of a corporation’s management. So, the NPM identifies how much of each revenue dollar a company generates is translated into profits. So, assume that Hanks Homes sold 10 houses last year for $500 million. And after subtracting all costs — management, operating, marketing, sales, interest and raw materials totaling $450 million — from $500 million in sales, Hank’s Homes earned a profit of $50 million. And because this is expressed as a percentage, Hank’s Homes had a net profit margin of 50/500, or 10 percent. If Hank’s NPM continue rise, then that could be a darn good sign of superior management. Other metrics that I use and believe are important include revenue growth, free cash flow, capital spending, return on capital and return on shareholder’s equity.

I don’t know Kenneth Colen; however, I knew his father, Sidney, prior to his passing a few years ago, and I know they’ve built several large, beautiful and stunningly successful developments in Florida. However, it’s my impression that a person’s satisfaction with his/her life depends more upon that person’s satisfaction with themselves rather than the ambiance of their milieu. I do know several folks who reside at Top of the World, and they’re happy as royalty.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at mjberko@yahoo.com. To find out more about Malcolm Berko and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

 

COPYRIGHT 2018 CREATORS.COM

 

 

You May Also Like
96-Year-Old Boca Helping Hands Volunteer Brings Happiness to Many

The nonprofit organization provides food, medical support and financial assistance to empower local individuals and families.

Read More
Art Polacheck
Upcoming JA Career Exploration Fair Seeks Vendors to Exhibit

It will take place from 10:30 a.m. to 12 p.m. on Friday.

Read More
JA Career
Neighbors 4 Neighbors Hosts Endless Summer Splash Event

The nonprofit organization is located in Doral.

Read More
Neighbors 4 Neighbors
Transworld M&A Brokers Sale of PCMA to Intelvio

Peter Berg (pictured), Managing Director, and Leanne Erwin (pictured). Vice President, advised on the transaction.

Read More
Transworld M&A
Other Posts
NAMI Broward County Hosts “NAMIWalks” Event at Nova Southeastern University

The annual fundraising event on Oct. 5 promotes mental health and wellness.

Read More
NamiWalks
Broward MPO’s “Let’s Talk Transportation” Podcast Series

The MPO shapes transportation policy and allocates federal funding to vital projects.

Read More
Broward MPO
Fort Lauderdale Economy Boosted by Panthers’ Stanley Cup Victory

The team will host a victory parade on Sunday.

Read More
Fort Lauderdale Economy
Editor’s Letter: Growth Mode at Nicklaus Children’s Health System

The top-flight healthcare provider features 500 pediatric subspecialists.

Read More
Nicklaus Children’s Health System

Drew Limsky

Drew Limsky

Editor-in-Chief

BIOGRAPHY

Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.