Practical Assessment of ROIIC, ROIC & Gic Factor

Practical Assessment of ROIIC, ROIC & Gic Factor

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Do not assess ROIIC, ROIC or Gic Factor alone.

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Individual assessment is inconclusive.

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Each just draws a single line of a triangle.

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ROIIC, ROIC & Groic Factor have to assess at the same time for a complete whole triangle picture.

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We deem a good prospect has emerged when :

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Concurrently:

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ROIIC > ROIC

&

ROIC > Clean Invested Capital Cost

&

Groic Factor ≥ 1

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Where,

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Groic Factor

= ROIC Growth Factor

= 1 + ROIC Growth

= 1 + Groic Ratio

= (1 + Gnp Ratio) ÷ (1 + Gic Ratio)

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Gnp Ratio

= Net Profit Growth Ratio

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Gic Ratio

= Invested Capital Growth Ratio

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Growth Factor

= 1 + Growth Ratio