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Harnessing Empirical Finance in Long-Term Investing Strategies with Dimensional’s Savina Rizova

Excess Returns

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Using a Value Composite to Scale Profitability

Cost of goods sale is a major expense for many companies so we wanted to incorporate back into the metric as well and when interest expense we also decided to include uh in the on the expense side of the profitability. We went with sales minus cost of goods sale minus s gna minus interest expense and then the pressure will do you divide by assets or by break because you want to scale both dollar profits by something this is where we decided to grow it with equity.

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