How to Calculate Return on Invested Capital

[@priyanshigupta1501]

you are such a blessing, thank you

[@xiaoyanzhang8398]

I wish you for more years!!!! thanks for such the amazing videos you have made so far. you have a knack for explaining difficult concepts in a way that makes them easier to understand

[@hui4149]

very detailed!

[@Mjames1010]

It’s like food wishes is teaching me finance.

[@m.abdullahmazhar3492]

Why different companies use different types of ROIC formulas? Will it not effect on doing comparison and evaluation between two companies?

[@Edspira]

When dealing with any types of ratios, there will be considerable variation in how the ratios are calculated. This is because ratios like ROIC are not required by GAAP, so people can calculate them however they feel best. It's like asking what is the correct way to prepare a hamburger. If you ask 10 people you might get 10 different answers. Investors have different beliefs about how ratios should be calculated so they make adjustments to formulas. And you are correct that this means one person might calculate ROIC differently than another person; however, the basic idea behind what the ratio is trying to measure should remain the same

[@vidya014]

Nopat, noplat will be a distorted figure respectively if the company has a high level of minority interest (Non-Controlling interest).