ROC
Definition
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.
Use ROC in a sentence
“ If there was any ROC I wanted to know about it and I told my friend, an employee of mine, that he had to. ”
“ The ROC was a useful measure for the investors who were being asked for additional funding because of the lawsuit. ”
“ While looking at companies to invest with, they did calculations of all their ROC's. They felt this was a good metric to measure them on. ”
