Return on Invested Capital (ROIC)

[TPI]

Hi,
Are there any online brokerage websites that have return on invested capital (ROIC) pre-calculated so one doesn't have to sift through financial statements?
Thanks for any tips.

 

[galumay]

Comsec's research includes Return on Capital, and Return on Investments, I havent broken down the numbers to check what they represent but i suspect ROI is ROIC. If you give me one you have calculated I can check and see if tit looks the same.

 

[TPI]

Comsec's research includes Return on Capital, and Return on Investments, I havent broken down the numbers to check what they represent but i suspect ROI is ROIC. If you give me one you have calculated I can check and see if it looks the same.

I haven't actually calculated one yet!

It's a bit confusing, but so far from my reading I think there are slight distinctions and varying definitions between things like return on assets, return on capital, return on capital employed and return on invested capital.

I think return on investments may be different though and is relating to actual investments made by the company eg. shares in other companies etc., but I could be wrong.

I'm not sure exactly how Commsec/Morningstar etc. calculate return on capital, but there is a specific way of calculating it that a guy called Joel Greenblatt suggests that seems the most logical to me and which is probably different to Commsec/Morningstar.

I think I may have found a source that calculates it in this way for all ASX stocks, but will post back once I confirm this.

I think also you can compare this return on capital or invested capital figure to a weighted average cost of capital (WACC) figure to get a better idea of the efficiency of a business in deploying incremental capital, with a bigger difference suggesting a better quality business with potentially greater economic moat.