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Return on capital. Return on capital ( ROC ), or return on invested capital ( ROIC ), is a ratio used in finance, valuation and accounting, as a measure of the profitability and value-creating potential of companies relative to the amount of capital invested by shareholders and other debtholders. [1] It indicates how effective a company is at ...
ROIC = NOPAT / Invested Capital. For example, a company that produced a $1 million annual NOPAT while investing $5 million during that year would have an ROIC of 20%. An average of the profits and ...
Return on investment ( ROI) or return on costs ( ROC) is the ratio between net income (over a period) and investment (costs resulting from an investment of some resources at a point in time). A high ROI means the investment's gains compare favourably to its cost. As a performance measure, ROI is used to evaluate the efficiency of an investment ...
Rate of return. In finance, return is a profit on an investment. [ 1] It comprises any change in value of the investment, and/or cash flows (or securities, or other investments) which the investor receives from that investment over a specified time period, such as interest payments, coupons, cash dividends and stock dividends.
Investors expect good returns. The more cash you get back for the amount you invested, the better your investment is. Same is true for the company you invest in. So, how do we find out whether a ...
A financial ratio or accounting ratio states the relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. Financial ratios may be used by managers ...
Return on capital employed. Return on capital employed is an accounting ratio used in finance, valuation, and accounting. It is a useful measure for comparing the relative profitability of companies after taking into account the amount of capital used. [1]
Cash return on capital invested. Cash return on capital invested [1] ( CROCI) is an advanced measure of corporate profitability, originally developed by Deutsche Bank 's equity research department in 1996 (it now sits within DWS Group ). This measure compares a post-tax, pre-interest cash flow to the gross level of capital invested and is a ...