Return on Capital Employed (ROCE)
What is Return on Capital Employed (ROCE)? Return on Capital Employed (ROCE), a profitability ratio, measures how efficiently a company is using its capital to generate profits. The return on capital employed metric is considered one of the best profitability ratios and is commonly used by investors to determine whether a company is suitable to...
Long Term Debt
What is Long Term Debt (LTD)? Long Term Debt (LTD) is any amount of outstanding debt a company holds that has a maturity of 12 months or longer. It is classified as a non-current liability on the company’s balance sheet. The time to maturity for LTD can range anywhere from 12 months to 30+ years...
Return on Invested Capital
What is Return on Invested Capital? Return on Invested Capital is a profitability or performance measure of the return earned by those who provide capital, namely the firm’s bondholders and stockholders. Return on Invested Capital (ROIC) can be defined as follows: Where: There are three key insights to be gained from this definition: We use...
Equity
What is Equity? In finance and accounting, equity is the value attributable to the owners of a business. The book value of equity is calculated as the difference between assets and liabilities on the company’s balance sheet, while the market value of equity is based on the current share price (if public) or a value...
Dodd-Frank Act
What is the Dodd-Frank Act? The Dodd-Frank Act, or the Wall Street Reform and Consumer Protection Act of 2010, was enacted into law during the Obama administration as a response to the financial crisis of 2008. It was named after its sponsors, US Senator Christopher Dodd and US Representative Barney Frank. The Dodd-Frank Act sought...
