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Find companies with high returns on capital from "summary" of The Little Book That Beats the Market by Joel Greenblatt
The secret to successful investing lies in finding companies that generate high returns on capital. This means identifying businesses that are able to generate more profit with the money they invest, ultimately leading to greater returns for shareholders. By focusing on companies with high returns on capital, investors can increase their chances of outperforming the market and achieving long-term success. To determine which companies have high returns on capital, one can look at a company's return on invested capital (ROIC). ROIC is a key metric that measures how effectively a company is able to generate profits from its investments. Companies with a high ROIC are able to generate more profit for each dollar of capital invested, making them attractive investmen...
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