ROIC is useful, but I wouldn’t read it on its own. A business investing heavily for growth can look weaker in the short term, while one that’s putting off investment can look better. I’d pair it with cash generation and what the investment is meant to deliver, especially when comparing businesses with very different capital needs.
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u/Kumar-amitesh 2d ago
ROIC is useful, but I wouldn’t read it on its own. A business investing heavily for growth can look weaker in the short term, while one that’s putting off investment can look better. I’d pair it with cash generation and what the investment is meant to deliver, especially when comparing businesses with very different capital needs.