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Birds of a Feather / Teens and Their Money


Subject:  Re: Stock of the Week: Activision (ATVI) Date:  2/27/2008  10:12 PM
Author:  Jognils Number:  1999 of 2683

Hey TMFGebinr,

Thank you so much for answering my questions so well! That clears up a lot of confusion.

I figured that being a merchandising business, Activision would have a large seasonal sales fluctuation, so it makes sense that you would compare growth using annual or same-quarter figures. Apparently I just didn't carry my assumption through to that logical conclusion.

The whole Trailing Twelve Months calculation makes a lot more sense now. I think I was trying to take the average of the four quarters rather than adding them, which seems pretty dumb now. Rolling the quarters also seems logical so that you can always incorporate the most recent quarter.

Thanks for the ROA and ROE example! Surprisingly, I did remember to take the average total assets and stockholders' equity, so I think if I correct the TTM net income, I should get a lot more reasonable number than I was getting before.

Again, thanks for taking the time to explain these concepts!

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