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Topic: Return On Capital

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In the News (Wed 21 Aug 19)

  Return on Invested Capital - ROIC
Return on Invested Capital or ROIC calculation points out the profitability of a company’s equity and debt.
ROIC is a better indicator of stock quality and strength than Return on Equity because it takes a company’s debt into account.
That’s a three percentage points increase in total return on investment coming from Company B. Remember when you own equity in a firm, you are also responsible for any incurred debt.
www.investortrip.com /explore-return-on-invested-capital   (378 words)

  Value Investing Encyclopedia: Return on Capital
In most cases, return on capital (however computed) is a good indicator of the relative profitability of various firms.
Return on capital is also known as return on invested capital, and abbreviated as either ROC or ROIC.
The fact that a source uses the term “return on capital” (or ROC) rather than “return on invested capital” (or ROIC) is not a good indication that cash assets are being counted as capital.
www.gannononinvesting.com /glossary/2005/12/return_on_capital.html   (466 words)

 Return On Investment Capital (ROIC)
Comparing a company's ROIC with its cost of capital (WACC) reveals whether invested capital was used effectively.
Invested capital can be in buildings, projects, machinery, other companies etc. One downside of ROIC is it tells nothing about where the return is being generated.
Spot Quality With ROIC - Return on invested capital is a great way to measure the true value produced by a company.
www.investopedia.com /terms/r/returnoninvestmentcapital.asp   (312 words)

 Fool.com: Return on Capital (Bore Port) October 14, 1998
Qualifying and quantifying "return on capital" and "cost of capital" are pursuits to which Alex and I have applied ourselves in our columns in the Evening News and in the other work that we've done for the Fool.
Now, this isn't a horrible return on capital and there's nothing wrong with the ROE on the face of things, but the growth rate of the company would play heavily into the price we would pay for this company.
Dividing the return on invested capital of 9.3% by 1.33 indicates a yield of 6.98%.
www.fool.com /BoringPort/1998/BoringPort981014.htm   (0 words)

 Return on Capital
Since capital is defined as equity plus long-term debt, the capital for the two companies is calculated as $20,000 and $12,000.
One way to think about them is that return on equity indicates how well a company is doing with the money it has now, whereas return on capital indicates how well it will do with further capital.
If your data source does not give you return on capital for a company, then it is easy enough to calculate it from return on equity.
www.sherlockinvesting.com /articles/capital.htm   (810 words)

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