InvestorWords.com

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.

• Types of Cash Investments
• Types of Advanced Options
• Types of Accounts Typically Offered by Banks
• What Does It Mean To Corner The Market?
• Deciding Whether Your Nest Egg is Big Enough
• Investing In Costa Rican Property

Featured Advertiser