% | $
Quotes you view appear here for quick access.

The Timken Company Message Board

you are viewing a single comment's thread.

view the rest of the posts
  • donttakemyword donttakemyword Sep 21, 1998 11:34 PM Flag

    time to buy?

    There are many factors that can affect book
    value, both up and down. As you rightly point out, in
    many industries, a fixed asset (such as building) only
    have value to the company that built it. As a more
    extreme example, Boeing has buildings for assembling
    aircraft that would be of much lower value for any purpose
    other than aircraft assembly. That, however, does not
    mean that the buildings are worth only a fraction of
    their cost; though in a forced liquidation they would
    not sell for anywhere near their carrying

    Conversely, if an asset has been fully depreciated, it will
    be carried on the books at no value (or only salvage
    value), even though it might have considerable

    Book value also does not include franchise value,
    which can be a significant asset for a company with a
    good reputation (such as TKR).

    For myself, part
    of my screening of investment prospects focuses on
    companies with strong financial positions; little debt,
    good current ratio (ideally liquid assets exceeding
    total liabilities), good interest payment coverage, and
    fixed assets that are reasonably well protected against
    diminution or impairment.

31.09+0.09(+0.29%)12:29 PMEDT