A summary of Michael Mauboussin and Dan Callahan’s paper, Calculating Return on Invested Capital: How to Determine ROIC and Address Common Issues.
More from ValueWalk on ROIC:
- A New Way to Listen to the Music: ROIC
- ROIC And Reversion To The Mean
- Investing: ROIC for dummies
- Importance of ROIC Part 5: Four Decades of Wells Fargo History
- The Importance Of ROIC: Compounders and Cheap Stocks
ROIC: the $1 test
A core test of success for a business is what Warren Buffett calls the $1 test, a simple test, which aims to show if one dollar invested in the company generates value of more than one dollar in the...

