The Cash Return On Invested Capital, or CROIC, measures how effectively a company uses its Invested Capital to generate Cash. It is calculated as Free Cash Flow divided by Invested Capital. This is measured on a historical basis.
CROIC = Free Cash Flow divided by Invested Capital. Invested Capital in turn is calculated as Total Equity + Total Liabilities - Current Liabilities - Excess Cash (using the Greenblatt definition of Excess Cash as cash at hand in excess of 5% of revenues).
The higher the CROIC, the better and a CROIC above 10% is usually regarded as good.
A variant of this is the CROCI, popularised by Deutsche Bank, which is the ratio of EBITDA to the total value of equity.
Ticker | Name | CROIC | StockRank™ |
---|---|---|---|
LON:RENX | Renalytix | 27491.80 | 8 |
LON:ONDO | Ondo InsurTech | 5500.00 | 13 |
LON:OBI | Ondine Biomedical | 3863.60 | 3 |
LON:BYIT | Bytes Technology | 2998.08 | 71 |
LON:CRTA | Cirata | 1611.69 | 6 |