Harvard Business Review

APRIL 16, 2015

The results can be impressive: if your firm’s return on invested capital is 8% and you have an 8% cost of capital, a 1% improvement in ROIC will increase firm value by 19%. There are just two ways to increase ROIC: improve operating profit (by increasing revenues or cutting costs) or invest capital more wisely.

CEO 8

CEO ROIC Cost of Capital Merton 8

Harvard Business Review

MAY 28, 2018

Thanks to the analysis, Nikon could identify and then interview past investors to understand the reasons they had purchased and then sold their Nikon shares. It would implement targets linked to shareholder value, including ROE and ROIC. Nikon could then follow up by asking what would persuade the investor to repurchase.

Company 8

Company ROIC CFO Restructuring 8

Harvard Business Review

DECEMBER 15, 2015

With analysis, Alphatech identified regional hospitals—which faced mandated digital-records requirements, and usually lacked the scale and IT staff to do that on their own—as their best customers. Business results were outstanding: EBITDA more than doubled in the first year and ROIC increased almost 300%, with fewer sales people.

Strategy 8

Strategy Team Discount ROIC 8

Harvard Business Review

MAY 24, 2017

A veritable alphabet soup (ROA, RONA, ROIC, ROCE, IRR, MVA, APV, and the like) exists to measure our financial capital. Teams of financial planning and analysis professionals measure actual and expected results for financial capital. But today’s great CEOs need to be equally great at managing human capital. Measure it.

Human Capital 15

Human Capital Management Company ROCE 15