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Some alternative methods to ROIC for measuring a company's efficiency in deploying its capital include Return on Assets (ROA), Return on Equity (ROE), and Economic Value Added (EVA). Each of these metrics provides a different perspective on how effectively a company is using its capital to generate profits.
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2020 was a challenging year but it was also a year of learning. New Constructs – a company that provides stock research tools on the market, published an important report that was featured in Forbes. The report analyzes the drivers of economic earnings: ROIC, NOPAT margin, invested capital turns and the weighted average cost of capital (WACC) for the S&P 500 – a stock market index that measures the stock performance of 500 large companies.
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Need help with which companies or projects to invest in? As a key driver of value in business, ROIC measures how well the company deploys its capital....
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