Cash Return on Invested Capital (CROIC)
Cash Return on Invested Capital (CROIC) is a financial metric that measures the amount of cash a company generates in relation to the amount of capital it has invested in its business. It is a measure of the company's ability to generate cash flow returns on the capital it has invested.
CROIC can be calculated in different ways, but the most common formula is:
CROIC = Free Cash Flow / Invested Capital
where:
- Free Cash Flow is the cash flow generated by the business after capital expenditures
- Invested Capital is the sum of a company's debt and equity used to finance its operations
A high CROIC indicates that a company is generating significant cash flows relative to the capital it has invested in the business, which is generally seen as a positive sign for investors. Conversely, a low CROIC may suggest that a company is struggling to generate cash returns on its investments.
Additional Details
| Metric Name | Type | Default Period Type |
|---|---|---|
| croic | fin_metric | FY |
Formatting Details
| Data Format | Display Format | Unit |
|---|---|---|
| float | perc | percentage |