Cash Return on Capital Invested (CROCI)


A measure of investment returns before taking into account the effect of capital structure. The cash return on capital invested is computed as the ratio of cash profits in proportion to the funding necessary to generate them and is found by the formula: earnings before interest, taxes, depreciation and amortization / invested capital. The invested capital is further defined as the total assets less excess cash not necessary for operations.
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cash return on assets ratio Return on Invested Capital