What is the better measure of return on capital, ROIC or ROCE?

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Credit Risk Management

	What is the better measure of return on capital, ROIC or ROCE? Created by : Venkatachalam C V, Sr. Associate, JP MorganChase \| 1 year ago Industry : Investment BankingFunctional Area : Derivatives(Markets) Keywords : Better Capital Measure Return ROIC ROCE Activity: 0 referals 464 views; last activity : 13 hours ago I wonder which measure is the best one for measuring the actual return ot the capital being used by companies.	Refer

ROIC

ROCE

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I believe that ROIC is a better measure of value distribution. I believe that investors should evaluate not only management's operating skill, but also its judgment in capital allocation. ROIC reflects the extent to which management shares its ability to create value with investors.
By Venkatachalam C V, Sr. Associate, JP MorganChase 1 year ago

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ROCE might be a better measure of value creation. ROCE is a pre-tax measure of return on capital, so if the firm has debt, it is inappropriate to compare it directly to WACC.

By Kausik Panda, Sr. Associate, ICICI Securities 1 year ago

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Arguments in: " What is the better measure of return on capital, ROIC or ROCE?"


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	1 0 ROCE is better known as ROA and is known as the 'acid test' one of the most important measures of a companies performance. Interest cost is controlable cost so ROIC or known as ROI is a secondary measure of corporate performance. By Mathew Cherian, Research Associate/Analyst, Western Michigan University \| 10 months ago Edit \| Delete Support \| Oppose 0 0 when we talk and think about the value creation ROCE is the better measure always.... By varsha , Head/VP/GM-Quality, frac \| 1 year ago Edit \| Delete Support \| Oppose
Argue for " ROIC"	Argue for " ROCE"
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Credit Risk Management

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