FT MarketWatch

ROC

Return on Capital. A measure of how effectively a company uses the Money (borrowed or owned) invested in ITS operations. Return on Invested Capital is equal to the following: Net operating income after taxes / [total assets minus Cash and investments (except in strategic alliances) minus non-interest-bearing liabilities]. If the Return on Invested Capital of a company exceeds ITS WACC, then the company created value. If the Return on Invested Capital is less than the WACC, then the company destroyed value.

Related Terms: 26 Asset, Borrow, Bear, Capital, Cash, Cap, GIC, Interest-bearing, Invested capital, Interest, Inc., ITS, Low, Money, Net, Net Operating Income, Owe, Own, Return on Invested Capital, Rating, Return, Ratio, Ring, Strategic alliance, Total assets, Tax
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