Description

An introduction to return on invested capital, including understanding the earnings figure used and how to calculate invested capital.

Learning Objectives

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1. Recall the formula for return on equity and return on capital.
2. Compare ROE and ROIC to understand their differences and similarities.
3. Calculate ROIC for a real company using financial statement information.
4. Evaluate a company's historical and future performance using ROIC
5. Understand the importance of ROIC as a value driver
6. Evaluate the impact of ROIC in mergers and acquisitions (M&A).