The calculator works out LVMH’s return on invested capital on a takeover of Tiffany by the fiscal year ending January 2025.

The main inputs are the value of LVMH’s offer per share, Tiffany’s compound revenue growth rate after the deal and its operating margin in 2025.

The starting point is Tiffany’s estimated revenue of $4.5 billion and operating profit of $790 million for the fiscal year ending in January 2020, according to forecasts compiled by Refinitiv.

The return on capital is measured against Tiffany’s weighted-average cost of capital, which Morningstar calculates at 8.6%.

If LVMH’s return is greater than its cost of capital, the figure is blue and the box opens. If the return is too low, the figure is red and the box remains closed.

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