Investing based on ROIC (Return on Invested Capital) can have several risks. Firstly, ROIC is a backward-looking measure, meaning it reflects past performance and may not accurately predict future returns. Secondly, it doesn't account for risk factors such as market volatility or changes in the economic environment. Thirdly, it may not reflect the true cost of capital if a company has a high level of debt. Lastly, companies can manipulate their ROIC figures through accounting practices, which can mislead investors.
Need help with which companies or projects to invest in? As a key driver of value in business, ROIC...
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