Concept Question: Return on X Capital

Hello all, just have a question as I'm currently preparing for full-time IBD. I get that ratios like EV/EBITDA are used for benchmarking comparables and interest coverage ratios matter for covenants, etc. but in practice how exactly are ratios like ROIC, return on equity (net income/shareholders' equity), etc. actually used.

Is it included in comp spreads? DCFs? or something else? Thanks ahead of time!

 

Hi SilverboyBaghs, no, I never sleep and so I can respond to any lonely threads (like this one) at all hours of the night. Impressive, I know ;-)

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No promises, but thought I'd mention a few relevant users that work in the industry: Rhiskens banchiere nakayamakatattsu

I hope those threads give you a bit more insight.

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