Return on Investment Capital

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Return on Investment Capital

A measure of how efficiently a company generates cash flow compared to how much capital is invested in the company. It is calculated by taking its net operating profit after taxes and dividends and dividing by the total amount of capital invested and expressing the result as a percentage. Companies seek to have a return on investment capital greater than its cost of capital. It is also called return on invested capital and simply return on capital.
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References in periodicals archive ?
[Y.sub.1] = EVA, [Y.sub.2] = NOPAT, [Y.sub.4] = WACC, and [Y.sub.4] = ROIC (dependent variables)
ROIC is frequently used for determining company profitability; gauges the payback on investment and specifies how well a company makes use of its overall assets; and it also indicates a company's capability to remunerate those who supply long term finances and to attract prospective suppliers of money (Gibson, 2011).Data stream uses following formula to calculate ROIC of companies:
But please note that this is not to say that finding short-term ways to increase ROE and ROIC that do not reduce sustainability is a bad thing at all.
Only about 17% of companies specifically disclose the use of ROIC or economic profit as a determinant of long-term performance in their plan for setting the long-term portion of executive compensation.
InSb IRFPAs detector is composed of InSb chip, indium bumps array, Si ROIC substrate, and underfill material.
Richard Baker, head of the real estate investment trust Retail Opportunity Investments Corporation (Nasdaq: ROIC), and the private mall landlord NRDC Equity Partners currently control Hudson's Bay.
(3) Return On Invested Capital (ROIC) is a non-GAAP measure and is defined as income from operations less other (income) expense and taxes, annualized, divided by the average of the two most recent quarter-end balances of assets less net current liabilities.
The broker is looking for a strategic refocusing of REC Silicon because it will strengthen the return on capital employed (ROIC) in the mid-term.
In fiscal 2006 and 2007, ROIC fell--the company was growing its lease portfolio faster than revenue and profits.