Comments on: The one must-have number for successful long-term investing http://jubakpicks.com/2010/03/02/the-one-must-have-number-for-successful-long-term-investing/ Sun, 12 Feb 2012 18:19:20 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Chris http://jubakpicks.com/2010/03/02/the-one-must-have-number-for-successful-long-term-investing/comment-page-1/#comment-4857 Chris Wed, 03 Mar 2010 01:50:14 +0000 http://jubakpicks.com/?p=3251#comment-4857 Anybody know where ROIC is on a Morningstar stock report. I don't know where to look. Anybody know where ROIC is on a Morningstar stock report. I don’t know where to look.

]]> By: FrozenFoot http://jubakpicks.com/2010/03/02/the-one-must-have-number-for-successful-long-term-investing/comment-page-1/#comment-4856 FrozenFoot Wed, 03 Mar 2010 01:42:35 +0000 http://jubakpicks.com/?p=3251#comment-4856 ROCE = EBIT / Capital Employed The main drawback of ROCE is that it measures return against the book value of assets in the business. As these are depreciated the ROCE will increase even though cash flow has remained the same. Thus, older businesses with depreciated assets will tend to have higher ROCE than newer, possibly better businesses. In addition, while cash flow is affected by inflation, the book value of assets is not. Consequently revenues increase with inflation while capital employed generally does not (as the book value of assets is not affected by inflation). love that wiki... ROCE = EBIT / Capital Employed
The main drawback of ROCE is that it measures return against the book value of assets in the business. As these are depreciated the ROCE will increase even though cash flow has remained the same. Thus, older businesses with depreciated assets will tend to have higher ROCE than newer, possibly better businesses. In addition, while cash flow is affected by inflation, the book value of assets is not. Consequently revenues increase with inflation while capital employed generally does not (as the book value of assets is not affected by inflation). love that wiki…

]]> By: FrozenFoot http://jubakpicks.com/2010/03/02/the-one-must-have-number-for-successful-long-term-investing/comment-page-1/#comment-4855 FrozenFoot Wed, 03 Mar 2010 01:33:51 +0000 http://jubakpicks.com/?p=3251#comment-4855 my company uses ROCE = return on capital employed... I assume it is same or similar to ROIC. We use it to evaluate our various plants and businesses. Everybody has to pull their ROCE weight or they are history.. my company uses ROCE = return on capital employed… I assume it is same or similar to ROIC. We use it to evaluate our various plants and businesses. Everybody has to pull their ROCE weight or they are history..

]]> By: marsdon1201 http://jubakpicks.com/2010/03/02/the-one-must-have-number-for-successful-long-term-investing/comment-page-1/#comment-4849 marsdon1201 Tue, 02 Mar 2010 22:15:40 +0000 http://jubakpicks.com/?p=3251#comment-4849 bsdgv, thanks for all the info and link, greatly appreciated. bsdgv, thanks for all the info and link, greatly appreciated.

]]> By: bsdgv http://jubakpicks.com/2010/03/02/the-one-must-have-number-for-successful-long-term-investing/comment-page-1/#comment-4838 bsdgv Tue, 02 Mar 2010 21:12:06 +0000 http://jubakpicks.com/?p=3251#comment-4838 I don't know if there is a source for sector ROICs but the most dependable sector level info is found on the S&P site. At industry level, I would go with Value Line (in your library). I think Jim got the ROIC for MCD from Daily Finance because the number at Money Central was different. If you have time, you can calculate your own ROIC: http://en.wikipedia.org/wiki/Roic I don’t know if there is a source for sector ROICs but the most dependable sector level info is found on the S&P site. At industry level, I would go with Value Line (in your library).

I think Jim got the ROIC for MCD from Daily Finance because the number at Money Central was different.

If you have time, you can calculate your own ROIC: http://en.wikipedia.org/wiki/Roic

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