Return on Gross Invested Capital (ROGIC)

What Is Return on Gross Invested Capital (ROGIC)?

Return on gross invested capital (ROGIC) is a measure of how much money a company procures in view of its gross invested capital — calculated as net operating profit after tax (NOPAT) partitioned by gross invested capital. Gross invested capital addresses the total capital investment, which is net working capital plus adjusted fixed assets plus accumulated depreciation and amortization. ROGIC is utilized on the grounds that it doesn't increase falsely, as different measures do, starting from the write of a resource's value.

Formula and Calculation of ROGIC

$\begin&\text = \frac { \text }{ \text } \&\textbf \&\text = \text \&\phantom{\text} = \text{(net operating profit before tax} \&\text{+ depreciation and amortization) * (1 - income tax rate)} \&\text = \text{net working capital + fixed} \&\text{assets + accumulated depreciation and amortization} \\end$

Everything that ROGIC Can Say to You

Essentially, ROGIC is the amount of money that a company procures on the total investment it has made in its business. The net operating profit after tax (NOPAT) figure is a company's cash earnings before financing costs. NOPAT accepts no financial leverage (as it prohibits interest charges).

NOPAT is operating income less taxes. NOPAT isn't to be mistaken for earnings before interest and taxes (EBIT) or earnings before interest, taxes, depreciation, and amortization (EBITA). NOPAT is likewise not normal for net income, where the last option incorporates interest expenses.

ROGIC is utilized to alleviate the effect of various depreciation policies companies might have.

ROGIC versus Return on Invested Capital (ROIC)

ROGIC and return on invested capital (ROIC) are comparative in that the two of them use NOPAT and invested capital. The difference is that ROGIC utilized gross invested capital, while ROIC utilizes just invested capital. Invested capital is the total debt, capital leases, and equity plus non-operating cash.

Both ROGIC and ROIC are key measures for recognizing companies that can consistently reward investors with outperformance. ROGIC calculations are utilized less every now and again than return on investment (ROI) figures, which measure the gains or losses generated on investments, relative to the amount of money invested.

Features

• Return on gross invested capital (ROGIC) is the amount of money a company makes relative to its total invested capital.
• ROGIC is utilized on the grounds that it doesn't increase falsely, as different measures do, starting from the write of a resource's value.
• ROGIC is calculated by taking the company's net operating profit after tax (NOPAT) and separating it by the company's gross invested capital.

FAQ

Is ROGIC and CROGI the Same Thing?

Indeed. Return on gross investment capital (ROGIC) and cash return on gross investment (CROGI) allude to something similar. They measure a company's cash flow in light of invested capital. The formula for ROGIC or CROGI is gross cash flow after taxes partitioned by gross investment.

Are ROI and ROIC the Same Thing?

No. ROIC measures how efficient a company is at generating income in view of its capital from debt and equity holders. Return on investment (ROI) is a return measure for a single activity or investment, calculated by separating the return from the investment by the cost of the investment.

What Is the ROC Formula?

Return on capital (ROC) is net income partitioned by debt plus equity. Return on equity (ROE) is just net income partitioned by shareholders' equity.