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:NANO | Nanoco | 1896.00 | 15 |
| LON:TNE | Technologies New Energy | 1454.25 | 23 |
| LON:ONDO | Ondo InsurTech | 1346.08 | 9 |
| LON:AVCT | Avacta | 1262.21 | 0 |
| LON:CLBS | Celebrus Technologies | 881.45 | 53 |