Tuesday, January 8, 2019
A Look at Climate Change Disclosures

Wednesday, January 2, 2019
Quants: Point-in-Time Data for Backtesting

Friday, December 28, 2018
Now Showing: Controls & Procedures

Thursday, December 27, 2018
A Reminder on Non-GAAP Reporting Rules

Monday, December 17, 2018
Researching PG&E’s Wildfire Risk

Wednesday, December 12, 2018
Tracking Brexit Disclosures

Thursday, December 6, 2018
Campbell Soup: Looking Behind the Label

Sunday, December 2, 2018
SEC Comment Letters: The Amazon Example

Wednesday, November 28, 2018
Measuring Big Pharma’s Chemical Dependency

Monday, November 26, 2018
Analysts, Can You Relate? A True Story

Monday, November 19, 2018
Digging Up Historical Trend Data: Quest Example

Sunday, November 11, 2018
Cost of Revenue, SG&A: Q3 Update

Monday, November 5, 2018
Lease Accounting: FedEx vs. UPS

Saturday, November 3, 2018
New Email Alerting Powers

Wednesday, October 31, 2018
PTC and Two Tales of Revenue

Tuesday, October 30, 2018
10-K/Q Section Text Change Detection

Sunday, October 28, 2018
Finding Purchase Price Allocation

Sunday, October 21, 2018
Charting Netflix Growth in Three Ways

Wednesday, October 17, 2018
Interesting Data on Interest Income

Thursday, October 11, 2018
The Decline of Sears in Three Charts

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Acquisitions are a very common part of the business landscape. Some work out well, others not as well. Predicting which will be which is more of an art than a science. But you can (and should) use hard data to at least determine what is your downside risk as an investor in the case the deal goes south.

On Calcbench, we do this using our newest feature…fully interactive disclosures that link each number in the text with its corresponding detailed XBRL info. The power of this is it allows us to trace any of our standardized metrics back to its source text in the ‘paper document’. 

We’ll start by going to our Interactive Footnote Viewer ( and pick a list of companies to look at: the S&P 500 for example.

Next, choose the topic we’re interested in: business combinations. In particular, we’ll look at the goodwill ‘created’ when companies buy other companies. (Goodwill in accounting terms is the amount paid for a company above and beyond the actual assets of that company). There is goodwill resulting from most every acquisition. However, large goodwill numbers can be a red flag, because they may lead to large write-downs if the acquisition doesn’t work out as hoped. (Potential example here pertaining to Microsoft’s purchase of Nokia)

Choose the metric using our explorer:

Now, let’s go through the S&P 500 and see what we can find. Choose the “Portion of Purchase Price Allocated to Goodwill” metric, and our list will come up.

Aha! Without going very far at all, here’s a case where goodwill is over $1 billion, and over 50% of the purchase price. Now it is up to the analyst to decide if this is a risk or not. But it is certainly something to consider in analyzing this company. If this acquisition does end up falling short of expectations, you can expect some of this goodwill to disappear, which will take earnings down with it.

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