Quarterly Return on Invested Capital
factor.formula
Quarterly ROIC:
EBIT (earnings before interest and taxes, excluding non-recurring items):
Invested capital:
Interest-bearing liabilities:
This formula calculates quarterly return on invested capital. The numerator is EBIT after deducting non-recurring gains and losses multiplied by (1 - income tax rate), and the denominator is invested capital at the end of the period.
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EBIT after deducting non-recurring gains and losses reflects the profitability of the company's main business.
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The company's applicable income tax rate. Here, the default rate is 25%. The company's actual income tax rate should be used in actual applications.
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The total amount of capital employed by a company at the end of the quarter, including shareholders' equity and interest-bearing liabilities.
factor.explanation
Quarterly Return on Invested Capital (Quarterly ROIC) is an indicator that measures the efficiency of a company's use of invested capital to generate profits. It reflects the company's profitability and capital operation efficiency within a quarter. This indicator more accurately evaluates the profitability of a company's core business by using EBIT after deducting non-recurring gains and losses, and uses the invested capital at the end of the period to measure the actual return on invested capital. Compared with annual ROIC, quarterly ROIC can reflect short-term changes in a company's operating conditions more promptly. It is an important indicator for evaluating a company's short-term operating efficiency and providing a reference for long-term trend analysis. A higher quarterly ROIC usually indicates that a company has strong profitability and capital utilization efficiency, and can bring better returns to investors.