Cash Return On Capital Invested (CROCI)
A method of valuation that compares a company's cash return to its equity. Developed by the Deutsche Bank's global valuation group, CROCI provides analysts with a cash flow based metric for evaluating the earnings of a company. Also known as "cash return on cash invested".
CROCI is found by the following formula:
Investopedia Says:
Cash return on capital invested is a variation of the economic profit model. In essence, CROCI measures the cash profits of a company as a proportion of the funding required to generate them. It acknowledges both common and preferred share equity (as well as long-term funded debt) as sources of capital. Related Terms:
Cash Flow Return on Investment - CFROI
Earnings Before Interest, Taxes, Depreciation and Amortization - EBITDA
Economic Profit (or Loss)
Gross Margin Return On Investment - GMROI
Metrics
Return On Investment - ROI
Return On Investment Capital - ROIC |