This factor belongs to the quality growth category and aims to capture the short-term trend of changes in the efficiency of the company's return on invested capital.

1. Factor logic: Return on invested capital (ROIC) is a core indicator to measure a company's ability to use capital to create income. The month-on-month change in ROIC can reflect the improvement or decline in the company's operating efficiency and profitability in the short term. Positive changes indicate that the company has become more efficient in the use of invested capital, which may indicate future growth potential, while negative changes may mean a decline in operating efficiency.

2. Factor significance:

• Quality dimension: ROIC itself is an important indicator to measure the quality of a company's operations. The month-on-month increase in ROIC reflects the improvement in the quality of the company's operations.
• Growth dimension: The increase in ROIC is usually associated with profit growth and value creation, so this indicator also has growth characteristics.
• Short-term perspective: Compared with year-on-year growth, month-on-month changes pay more attention to the company's short-term operating changes and can capture the dynamics of the company's operating conditions more promptly.

3. Calculation options:

• Single quarter data: Using single quarter data instead of TTM (rolling 12 months) data can better reflect the company's short-term operating changes and avoid smoothing recent changes due to historical data.
• Month-on-month changes: Month-on-month changes more sensitively reflect the company's changes in adjacent reporting periods and can capture the turning point of operating conditions more timely.
• Increment instead of growth rate: Using increment instead of growth rate avoids large fluctuations in growth rate when the absolute value of ROIC is low, making the factor performance more stable.

4. Potential applications:

• This factor can be combined with other quality or growth factors to build a multi-factor stock selection model.
• It can be used as a reference indicator for analysts when evaluating the company's short-term operating change trends.
• It can be used to identify companies that are improving their operating efficiency and may have investment potential.

5. Notes:

• For industries that are greatly affected by seasonal factors, their month-on-month changes in ROIC may also have large seasonal fluctuations, and should be appropriately adjusted or combined with other indicators for analysis.
• It is necessary to conduct a comprehensive analysis based on industry characteristics and the company's own situation to avoid over-reliance on a single indicator.