Bill Ackman
Simple, predictable, cash-generative, and not dependent on borrowing.
| Measure | Formula | Median | Middle half | Reporting it |
|---|---|---|---|---|
| Free cash flow | Operating cash flow − capital expenditure | $746.10m | $87.12m – $2.61bn | 526 |
| Return on capital employed | Operating income ÷ (equity + total debt) | 10.2% | 5.6% – 16.7% | 444 |
| Operating margin | Operating income ÷ revenue | 15.0% | 6.0% – 24.7% | 516 |
| Debt to equity | Total debt ÷ shareholders’ equity | 0.79x | 0.39x – 1.45x | 442 |
Where each comes from
| Free cash flow | The stated requirement that a business generate free cash flow rather than merely report earnings. |
|---|---|
| Return on capital employed | High returns on capital as the marker of the barriers to entry he describes looking for. |
| Operating margin | Pricing power, which is where a barrier to entry shows up in the accounts. |
| Debt to equity | Limited capital intensity and a balance sheet that does not force a decision at the wrong moment. |
Source: Pershing Square annual letters and investor presentations, which state the criteria consistently.
What this cannot tell you
Concentration and activism are the other half of the method: he buys few businesses and then involves himself in them. Neither is a property of a filing.
This page describes a published method and applies its measures to filings. It is not a score, not a ranking and not a recommendation, and no page here aggregates these into a verdict. · All 11 metrics