Cash Return On Invested Capital %, Last Year

What is the definition of CROIC %, Last Year?

Cash Return On Invested Capital (CROIC or CROCI) measures how much cash a company cgenerate based on each dollar it invests into its operations. It is similar to ROIC but focuses on cash, rather than profits. 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).


Stockopedia explains CROIC %, Last Year...

The higher the CROIC, the better and a CROIC above 10% is usually regarded as good.

A variant of this is CROCI, popularised by Deutsche Bank, which is the ratio of EBITDA to the total value of equity. This was written up by John Authers in the FT here.

You can read more about CROCI here.

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