Working Capital measures a company's short-term financial health by subtracting current liabilities from current assets on the balance sheet.
The longer this cycle, the longer a business is tying up capital in its working capital without earning a return on it. Companies strive to reduce their working capital cycle by collecting...
Risk-adjusted return on capital (RAROC) is a risk-based... [citation needed] Contents 1 Basic formula 2 Decision measures... McKinsey Working Paper on Risk. 24: 1–20 – via McKinsey....
The working capital turnover ratio compares a company’s net sales to its net working capital (NWC) in an effort to gauge its operating efficiency. ; In practice, the working capital turnover metric is a useful tool for evaluating how efficiently a company uses its working capital to produce more revenue. ; To calculate the turnover ratio, a company’s net sales (i.e. “turnover”) must be divided by its net working capital (NWC). ; While the working capital metric can be used – i.e. current assets minus current liabilities – the net working capital (NWC) is a more practical measure, since only operating assets and liabilities are included.
Days Working Capital (DWC) reflects a company's operational efficiency by estimating the time to convert working capital into revenue.
Return on Invested Capital (ROIC) measures the percentage return of profitability earned by a company using capital contributed by investors.
[1] In economic terms, it is one way of relating profits to capital invested. Contents 1... The most comprehensive formula is: Return on investment (%) = (current value of investment if not...
1 Return on Capital (ROC), Return on Invested Capital (ROIC) and Return on Equity (ROE): Measurement and Implications Aswath Damodaran Stern School of Business July 2007 2 ROC, ROIC and ROE...
Return of capital (ROC) is a payment, or return, received from an investment that is not considered a taxable event and is not taxed as income.
Return on equity (ROE) vs. return on capital (ROC) are two distinctly different formulas, as one includes only combined profit while the other considers debt.