Pay attention to the return on invested capital from "summary" of Buffettology by Mary Buffett,David Clark
The return on invested capital is a concept that is crucial to understand when evaluating the performance of a company. Essentially, return on invested capital measures how efficiently a company is able to generate profits from the capital it has invested in the business. This metric is important because it provides insight into the company's ability to generate returns for its shareholders. A high return on invested capital indicates that a company is able to generate significant profits from the capital it has invested, while a low return on invested capital suggests that the company is not effectively utilizing its resources to generate returns. When evaluating a company, it is important to pay attention to the return on invested capital because it can provide valuable insights into the company's financial health and performance. By analyzing this metric, investors can gain a better understanding of how efficiently a company is able to generate profits and whether it is a good investment opportunity.- Return on invested capital is a key metric that can help investors assess the efficiency and profitability of a company. By paying attention to this metric, investors can make more informed decisions about which companies to invest in and ultimately improve their chances of achieving successful investment outcomes.
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