Comparing the 2 most important ratios in finance, ROIC vs WACC. The greater the gap, the more value a company creates, and if the gap goes negative, it destroys value. Understanding ROIC is important, but understanding the relationship is even more important.

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Todor Kostov's avatar
@ifb_podcast One of the most important metrics if not the most ...
Buying Your Time's avatar
Hard to go wrong if you have a reasonably valued company that produced a decent ROIC over a long period of time. Sometimes it's just that easy ... kind of.
Dave Ahern's avatar
@buyingyourtime sometimes….I think Charlie said once “find a company that can compound Capital at high rates for a long time and you will do well.” Sounds easy….
Buying Your Time's avatar
@ifb_podcast So easy to over complicate. I think a lot of it's psychology and patience. And i agree with Charlie, at the end of the day if a company delivers a high return on capital and has a good balance sheet then it should perform well over the long term.



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