| Return On Capital |
Article Index for Return On |
Articles about Return On Capital |
Website Links For Return |
Information AboutReturn On Capital |
| CATEGORIES ABOUT RETURN ON CAPITAL | |
| financial ratios | |
|
In Economics , return on capital, also known as return on invested capital, is a non- GAAP financial measure that quantifies how well a company generates cash flow relative to the capital it has invested in its business. It is defined as Net Operating Profit Less Adjusted Taxes divided by invested capital and is usually expressed as a Percentage . In this calculation, capital invested includes all monetary capital invested: shareholders' equity plus financial debt. When the return on capital is greater than the Cost Of Capital (usually measured as the Weighted Average Cost Of Capital ), the company is creating value; when it is less than the cost of capital, value is destroyed. Return on Invested Capital (ROIC) can be computed as: SEE ALSO
|
|
|