Connection between the USD, Gold & Oil & inflation

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The connection between the U.S. dollar, gold, and oil is driven by global pricing in U.S. dollars, inflation impacts, and shifting safe-haven trends. [1, 2, 3]

The U.S. Dollar Link

Pricing Currency: Both crude oil and gold are traded globally in U.S. dollars (USD).
Inverse Effect: When the U.S. dollar goes up in value, it usually makes oil and gold more expensive for buyers using other currencies, which tends to push their prices down. When the dollar drops, oil and gold often become cheaper for foreign buyers, pushing their prices up. [1, 2, 3]

The Oil and Gold Connection

Inflation Driver: Rising oil prices increase the cost of goods and energy, which causes high inflation. [1, 2, 3]
Safe-Haven and Rates: When inflation goes up, investors often look to gold to protect their money. However, if high oil prices force central banks to raise interest rates to fight inflation, it can hurt gold prices because gold does not pay interest. [1, 2, 3, 4]
Direct vs. Independent Shifts: While both are vital global resources, their day-to-day prices do not always move together and can react independently based on political conflicts or supply fears. [1, 2]

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Add to this the impact of US inflation.

U.S. inflation affects gold, oil, and the U.S. dollar (USD) primarily through interest rate expectations, currency valuations, and commodity demand. Higher inflation typically drives up interest rates, which strengthens the USD and can pressure non-yielding assets like gold, while oil reacts to both inflation-driven energy costs and shifting economic growth. [1, 2, 3, 4, 5]

Impact on the U.S. Dollar (USD)

Short-term boost: High inflation forces the Federal Reserve to raise or maintain high interest rates, attracting foreign investment into U.S. assets and strengthening the dollar.
Loss of purchasing power: Over the long term, persistent domestic inflation erodes the actual buying power of a single dollar unit. [1, 2, 3, 4, 5]

Impact on Gold

Inflation hedge: Gold acts as a traditional safe store of value when fiat currency loses purchasing power.
The interest rate tradeoff: Higher inflation often leads to tighter monetary policy (higher bond yields). Because gold pays no interest, rising real yields frequently cause gold prices to dip despite high inflation. [1, 2, 3, 4, 5]

Impact on Oil

Direct correlation: Oil is priced globally in U.S. dollars and surges when energy demand rises or supply constraints create cost-push inflation. [1, 2, 3, 4]
The USD feedback loop: A stronger USD (caused by anti-inflation rate hikes) makes oil more expensive for foreign buyers, which can cap or reduce crude oil demand and prices. [1, 2, 3, 4, 5]

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Sweetness in Single origin Coffees

 what is the sweetest single origin coffee?

“Sweetest” in coffee terms usually means the cup has natural sugar-like flavors (think honey, caramel, fruit, or chocolate), low bitterness, and balanced acidity. Sweetness depends on the origin, varietal, processing method, and roast.

Here are some of the sweetest single-origin coffees, known for their naturally sugary, dessert-like flavor profiles:

🌺 Ethiopia – Natural (Dry) Process Coffees

Regions: Sidamo, Yirgacheffe, Guji

Tasting notes: Blueberry, strawberry, honey, jasmine, chocolate

Why sweet: The natural (sun-dried) process concentrates sugars and fruit flavors in the bean.

Example: Ethiopian Guji Natural — famous for its berry jam sweetness and floral aroma.

    - Ethiopia

    - Ethiopian Sidamo & Guji

🍯 Panama – Geisha (Gesha) Variety

Regions: Boquete, Volcán, Baru

Tasting notes: Honey, peach, jasmine, bergamot

Why sweet: The Geisha varietal is low in bitterness and high in natural sugars and aromatics.

🍫 El Salvador – Pacamara or Bourbon Varietals

Regions: Santa Ana, Chalatenango

Tasting notes: Milk chocolate, caramel, brown sugar, red apple

Why sweet: Grown at high altitudes, these varietals develop syrupy sweetness and a smooth body.

Example: El Salvador Santa Ana Pacamara — buttery caramel sweetness and a silky finish.

🍓Colombia – Honey or Natural Process

Regions: Huila, Nariño, Tolima

Tasting notes: Red fruit, panela (raw sugar), chocolate

Why sweet: The honey or natural process retains mucilage sugars, enhancing sweetness.

Example: Huila Honey Process — balanced sweetness with a clean aftertaste.

   - Colombian coffee

🍊 Costa Rica – Honey Process

Regions: Tarrazú, West Valley

Tasting notes: Citrus, brown sugar, toffee, apricot

Why sweet: The honey process is famous for boosting fruit and sugar notes without fermenty flavors.

Example: Costa Rica Tarrazú Yellow Honey — caramel sweetness with bright orange-like acidity.

 - Costa Rica

| Origin                 | Process        | Flavor Profile        | Sweetness Level |

| ---------------------- | -------------- | --------------------- | --------------- |

| Ethiopia (Guji)        | Natural        | Blueberry, honey      | ⭐⭐⭐⭐⭐           |

| Panama (Geisha)        | Washed/Natural | Peach, jasmine, honey | ⭐⭐⭐⭐⭐           |

| El Salvador (Pacamara) | Washed         | Caramel, chocolate    | ⭐⭐⭐⭐            |

| Colombia (Huila)       | Honey          | Panela, red fruit     | ⭐⭐⭐⭐            |

| Costa Rica (Tarrazú)   | Honey          | Toffee, citrus        | ⭐⭐⭐⭐            |

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Coffee index. Click here :

https://djjondent.blogspot.com/2024/03/coffee.html

CKF - Collins Foods

 CKF - Collins Foods

22 July 2026

https://www.collinsfoods.com/investors/news-and-announcements/

https://www.intelligentinvestor.com.au/shares/asx-ckf/collins-foods-limited/financials

https://stockanalysis.com/quote/asx/ckf/

https://www.tradingview.com/symbols/ASX-CKF/financials-overview/

https://www.marketindex.com.au/asx/ckf

https://koalagains.com/stocks/ASX/ckf

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Over the last 5 years, ASX:CKF (Collins Foods) has grown its revenue consistently but experienced volatile profits, with a steep plunge in FY25 before a major recovery in FY26. While net debt increased for most of the period (200%), the company has actively paid it down. [1, 2, 3, 4]

Key Financial Metrics & Performance

• Revenue: Steady top-line growth over the past 5 years, reaching a record $1.59 billion from continuing operations in FY26. [1]

• Profit (NPAT): Highly volatile. Net profit hit historical highs around $76 million in FY24, dropped roughly 88% to $8.8 million in FY25 due to European restructuring/impairments and inflation, but rebounded strongly in FY26, with statutory profit jumping 280.5% to $47.1 million. [1, 2, 3, 4]
• Debt: Net debt grew significantly over the past several years  (about 200%) but was reduced to $119.6 million by the end of FY26. The net leverage ratio improved to 0.77, giving the company increased capacity to invest in its core markets. [1, 2, 3]

https://stockanalysis.com/quote/asx/ckf/financials/ratios/

These are the D/E ratios for the last 5 years:

2026 - 2.00

2025 - 2.00

2024 - 2.20

2023 - 1.96

2022 - 2.19

• Return on Equity (ROE): Has fluctuated with net income. It peaked near 19.4% in FY23 but compressed heavily during the FY25 downturn before rebounding alongside profitability in FY26. [1, 2]

For the full year 2026 (FY26), Collins Foods (ASX: CKF) achieved a Return on Equity (ROE) of 11.39%. This indicates how efficiently the company is using these equity investments to generate profit and shareholder value. [1, 2]

Key Financial Metrics & Full Year Highlights (FY26)

Collins Foods reported record Group Revenue and strong underlying profits for the 53 weeks ended 3 May 2026. [1]

• Return on Equity (ROE): 11.39%
• Group Revenue: $1,592.6M (up 8.6% from FY25)
• Underlying NPAT: $61.4M (up 13.0%)
• Statutory NPAT: $47.1M (up 280.5%)
• Total FY26 Dividend: Fully franked (3.8% per year) 28.0 cents per share (cps), consisting of a 15.0 cps final dividend
• Capital Return and Strategy: The company successfully announced a strategic exit from Taco Bell in Australia to focus primarily on KFC and finalized the acquisition of eight KFC restaurants in Bavaria, Germany

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• Dividends: The company has managed to maintain or grow dividends despite earnings fluctuations, declaring a total FY26 fully franked dividend of 28.0 cents per share (up from 26.0 cents in FY25). [1]

Strategic Moves & Outlook

The recent bottom-line improvement is largely driven by its highly reliable KFC Australia operations. Meanwhile, the company has actively restructured its international and secondary portfolios by strategically acquiring additional stores in Germany and announcing an exit from the Taco Bell brand in Australia to refocus its capital. [1, 2, 3]

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PE Ratios

The Price-to-Earnings (P/E) ratio for Collins Foods Limited (ASX: CKF) has historically fluctuated between a low of 11.02 and a high of 157.84 over the last 10 years, carrying a 10-year median of 23.94. [1, 2]

Historical P/E Ratio Overview (2016–2026)

Collins Foods' P/E ratio trends mirror shifts in its fast-food footprint (KFC and Taco Bell) and notable accounting adjustments (such as AASB 16 lease changes). A massive outlier occurred in FY25 when a steep, temporary drop in statutory net income caused a massive technical spike in the trailing P/E ratio. [1, 2]

• Current P/E Ratio (Mid-2026): ~20.20 (based on normalizing normalized earnings), though some platforms report a trailing 12-month (TTM) P/E up over 110x depending on how the prior year's compressed earnings are filtered.
• Forward P/E Ratio: 14.58 to 14.65, signaling an expectation of normalized earnings recovery going forward.
• 10-Year High: 157.84 (hit during the volatile FY25 compressed-earnings cycle).
• 10-Year Median: 23.94.
• 10-Year Low: 11.02. [1, 2, 3, 4, 5]

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Approximate Annual P/E Ratio Clean Tracking

Below is the approximate financial year-end trailing P/E trend gathered across historical financial tracking platforms like GuruFocus and Stock Analysis: [1]

Year [1, 2, 3]	Approximate P/E Ratio (Year-End)	Context & Driver
2026 (Current)	20.20	Earnings normalization; improved margin efficiency.
2025	119.00	Spike caused by an 84% plunge in net profit due to high input expenses.
2024	22.39	Strong consumer demand resilience despite rising inflation.
2023	109.96	Statutory impairments on underperforming stores bloated the P/E structure.
2022	15.10	Strong post-lockdown fast-food sales velocity.
2021	79.53	High COVID-19 related non-cash write-downs artificially minimized EPS.
2020	22.02	Baseline pandemic operational consistency.
2019	17.50	Stable European KFC market build-out.
2018	16.90	Standard operational retail valuation multiple.
2017	18.20	Acquisition expansion of KFC networks across Australia.
2016	15.40	Steady organic fast-food growth phase.

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Key Takeaways for Investors

• Beware the Statutory Spikes: Collins Foods routinely reports structural differences between "Statutory" and "Underlying/Normalized" profit. Non-cash impairments heavily skew the raw data. []
• Current Value Proximity: Trading at a forward P/E of roughly 14.6x, CKF is tracking noticeably cheaper than its historic 10-year median. This drop points to a compression in valuation multiples across ASX consumer discretionary stocks. [1, 2, 3]

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Charts

Buy below $8

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ROIC Vs WACC

Collins Foods Limited (ASX:CKF) has historically maintained a return on invested capital (ROIC) that hovers around 6% to 9% against a weighted average cost of capital (WACC) estimated at roughly 5% to 7.7%, yielding a modest positive spread that indicates steady value creation. [1, 2, 3, 4]

Capital Efficiency and Value Creation

ROIC Range: Over recent reporting periods spanning its historical profile, Collins Foods shows an ROIC generally tracking between 6.4% and 8%, reflecting consistent operating profitability from its core quick-service restaurant operations across Australia and Europe. [1, 2, 3, 4]
WACC Range: Estimates for CKF's WACC cluster in the 5.3% to 7.7% range, driven by a capital structure balanced with moderate debt weighting (near 46%) and an underlying cost of equity of about 7.8%. [1, 2]
Spread Analysis: The marginal difference (ROIC minus WACC) generally stays near even or slightly positive, pointing to an environment where the company incrementally creates shareholder value through store network expansions and steady earnings performance, though returns remain sensitive to competitive pricing pressures and delivery cost fluctuations

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Buffett analysis

Collins Foods Limited (ASX: CKF) exhibits a highly volatile historical Return on Equity (ROE) that structurally falls short of Warren Buffett’s ideal benchmarks. While its core operational asset, KFC Australia, is a resilient cash generator, the company relies heavily on debt financing and aggressive international store expansions to manufacture its equity returns. [1, 2, 3, 4]

This structure introduces distinct deviations from a classic "Buffett style" compounding engine.

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Historical ROE Trends (FY22 – FY26)

Collins Foods’ statutory ROE is characterized by steep, cyclical swings rather than steady compounding. This volatility is largely driven by one-off impairments, lease accounting changes (AASB 16), and restructuring costs (such as their recent exit from Taco Bell Australia). [1, 2, 3, 4]

Metric	FY2022	FY2023	FY2024	FY2025	FY2026
Statutory ROE	13.9%	3.3%	18.0%	1.4%	10.5%
Shareholders' Equity	$430M	$412M	$426.4M	$405.3M	$421.7M
Statutory NPAT	$54.8M	$11.3M	$76.7M	$8.8M	$47.1M

The underlying business is more stable than the statutory numbers suggest. For instance, in FY2026, underlying Net Profit After Tax (NPAT) rose 13% to $61.4 million, bringing the underlying ROE closer to a healthy 14.6%. However, the sharp drop in FY25 highlights how vulnerable bottom-line margins are to inflation and cost-of-living pressures in the Quick Service Restaurant (QSR) sector. [1, 2, 3, 4]

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Comparison to Buffett Benchmarks

Warren Buffett looks for companies with a durable competitive advantage (moat) capable of generating clean, high returns on capital without relying on excessive debt or financial engineering.

1. The ROE Standard (Buffett Target: >15% Consistently)

The Benchmark: Buffett targets businesses that can consistently generate an ROE above 15% on a clean, unleveraged basis.
CKF vs. Benchmark: Over the last five years, CKF's average statutory ROE is roughly 9.4%. Even on an underlying basis, it struggles to sustainably breach the 15% mark. For a value investor, the lack of consistency indicates the presence of a "commodity-type" business rather than a high-moat compounder. [1, 2]

2. Debt & Financial Leverage (Buffett Target: Low Debt / High Interest Coverage)

The Benchmark: Buffett avoids heavily leveraged businesses, famously keeping Berkshire Hathaway's debt-to-equity exceptionally low (historically under 0.20x for non-insurance operations). He requires strong interest coverage (typically >5x) so a business can easily weather economic downturns. [1]
CKF vs. Benchmark: This is where CKF deviates furthest from the Buffett archetype.
• Debt-to-Equity Ratio: CKF carries a massive 2.00x debt-to-equity ratio, with total debt hovering around $842.8 million.
• Interest Coverage: Its interest coverage ratio is tight at 2.42x.
• Analysis: CKF uses high debt loads to acquire and construct stores, artificially inflating its ROE. A truer measure of their efficiency is Return on Invested Capital (ROIC), which factors in that debt. CKF's ROIC sits at a modest 6.40%, demonstrating that the business requires massive capital injections to generate its profits. [1, 2, 3, 4]

3. Capital Allocation & Retained Earnings (Buffett Target: High Incremental Returns)

The Benchmark: Buffett looks at how efficiently management deploys retained earnings. Every dollar retained must create at least one dollar of market value over time via high-return organic growth or smart acquisitions.
CKF vs. Benchmark: CKF operates a mixed dual-track allocation strategy:
• The Good (KFC Australia): Retaining capital to expand the domestic KFC footprint is highly efficient. KFC Australia generates strong, defensive operating cash flows ($150M+ annually) and acts as the company's financial anchor.
• The Bad (Taco Bell & Over-Expansion): Management's capital allocation has suffered from missteps. They fully exited the underperforming Australian Taco Bell brand in 2026 after failing to gain traction.
• The Risk (KFC Europe): Capital is increasingly being funneled into lower-margin, capital-intensive rollouts in Germany and the Netherlands. While this drives revenue growth, Europe generates lower initial returns on capital than Australia, diluting overall corporate efficiency. [1, 2, 3, 4]

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The Value Investor's Verdict

From a pure Buffett perspective, Collins Foods is a capital-hungry roll-up story rather than a capital-light economic moat.

While the stock frequently displays appealing low earnings multiples and a reliable 3.4% fully franked dividend yield, its returns are structurally capped by high capital requirements, heavy debt leverage, and thin net profit margins (~3.9%). It is a robust cash generator, but it requires too much leverage and capital reinvestment to fit the strict criteria of a classic Buffett compounder. [1, 2, 3, 4, 5]

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