I always heavily got caught up with this one in the corporate finance literature. Probably I should not be so stubborn about it but I just don't get how this heuristic would hold in the modern world?
Example a): company grows strongly through sales transformation programs which significantly increases their pricing => growth but not linked to CapEx reinvestment
Example b): company grows through strong marketing push => growth but not CapEx related
Example c): manufacturing company has strong but saturated position in major market with state of the art manufacturing facility at ~20% ROIC. Company now invests to build factory for adjacent products for low cost markets with much lower ROIC profile => growth and CapEx related but with different ROIC then current
Bottom line: I can think of hundreds of cases where there is no clear realtionship between growth, existing ROIC and reinvestment.
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