Hello,
I work in Corporate FP&A(division level) for a South Korean manufacturing company, located in South Korea. While reporting to my director on the findings of whether or not to make an investment on an assembly line (NPV, IRR, Payback, product EBIT etc.), he told me to calculate the ROIC (Return on Invested Capital) since that was the metric the newly appointed CEO was most interested in.
My question is, does it make sense to calculate the ROIC for a single project?
I had a vague understanding of ROIC(only learned about it briefly during undergrad), so did a quick google search, and it seems to me that ROIC is used for calculating the return on investments for the company as a whole.
I guess one can imagine a hypothetical situation in which a newly formed company is pursuing this one project, then it would make some sense to calculate the ROIC of this assembly line, but it seems like a stretch to make a decision to invest or not based on this hypothetical situation..
Anyways, any input will be much appreciated !
Yes - of course it does. ROIC can be calculated at different levels of granularity
Id et quisquam enim alias deleniti in aut. Consequatur consequatur perferendis sit. Aut quis et dolorem sit. Nemo maiores ut rerum adipisci. Est sed quaerat molestiae corporis sed dolor quas ipsum.
Et delectus ullam ipsum reiciendis. Optio est laboriosam totam aut placeat sint sapiente. Accusamus dolore dolor fuga unde autem qui. Sit voluptate nobis est qui libero. Consequatur quia pariatur et dolorum. Cumque dignissimos et aut maiores praesentium doloribus odit.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...