Is Return on Capital (ROC) affected by changes in debt

What happens to ROC if you increase debt...I believe it would just stay the same, correct?

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Comments (2)

Jan 29, 2013

Look at the formula for ROC: http://en.wikipedia.org/wiki/Return_on_capital

If the denominator is going up and all else remains equal, you're naturally going to have a lower ROC.

Also... why did you tag this "Goldman Sachs?"

Jan 29, 2013