Return on Invested Capital vs Return on Capital Employed | Phil Town

and are 2 ratios that investors utilize to examine a company's practicality as an investment. However what are they really?

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00:00 – Introduction
01:23 – What Sets These 2 Values Apart
03:15 – Download: Must-Have Checklist
03:22 – Question: Which Do You Believe Is More Prized Possession When Examining A Possible Financial Investment: ROIC Or ?



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Return on Invested Capital vs :

Return on Invested Capital vs Return on Capital Employed | Phil Town

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About the Author: Richard Money


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  2. tbh i dont care much abt roic or roce as long as revenue profit cash flow gone up and the price reasonable to conservative value It is in my watchlist

  3. C’mon Phil I’m disappointed, knowing ROCE can be super useful especially now with increasing interest rates, a company that depends on low interest loans to generate revenue will see a dip in ROIC as interest rates go up (as cost of capital increases)

  4. Phil your audio is a bit amateurish it’s sub-par when compared with all other aspects of your video.
    So if u want to improve something – go for the audio.
    Just get a mike.
    Just a thought.

  5. Wouldn’t the cost of capital simply be the interest rate that a company pays on any debt it takes?
    So Google would have a very low cost of capital — they can get money with a very low interest rate of like 3-4% (it may have went up recently though).

    Whereas a company with a poor credit rating may have a higher cost of capital and have to pay like 10-15% on any money it borrows.

    1. That’s what Ive been thinking. It’s not a random number but a clear percentage shared by the bank. Or we are missing out on something here ?

  6. I’ll stick with Return on Investment. I’m lazy and a simple value investor! Amen brother, ignoring financial planners and investment bankers is always wise! 😅

  7. It seems to me that ROIC is more practical to ROCE, because ROIC is compared to zero, which is simple enough. But if both use EBIT in the numerator, that is Earnings before Interest and Taxes, I am a little confused. Why not Income after Interest and Taxes, simply the Cash Flow divided by the invested capital 🤷

  8. Do you even think it’s valuable to take a look at Return on Capital Employed? Or do you think it’s just a fiction of business school imagination?

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