Return on Capital, 5 Yr Average

What is the definition of ROC % Greenblatt 5y Avg?

Return on Capital is used by Joel Greenblatt in his Magic Formula to measure the rate of return a business is making on the total capital used in the business. His definition uses EBIT / (Net Working Capital + Net Fixed assets). Companies that can earn a high ROC over time generally have a special advantage that keeps competition from destroying it. This field is the 5 year average of the ROCE.


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