What Is Return on Market Value of Equity (ROME)? The term “return on market value of equity” (ROME) refers to a measure used by analysts and investors to compare the performance and value of companies of different sizes and values. Professionals use the return on market value of equity to identify companies that generate positive
What Is Return of Capital (ROC)? Return of capital occurs when an investor receives a portion of their original investment that is not considered income or capital gains from the investment. Note that a return of capital reduces an investor’s adjusted cost basis. Once the stock’s adjusted cost basis has been reduced to zero, any
What Is Return on Assets (ROA)? The term return on assets (ROA) refers to a financial ratio that indicates how profitable a company is in relation to its total assets. Corporate management, analysts, and investors can use ROA to determine how efficiently a company uses its assets to generate a profit. The metric is commonly
DEFINITION of Return-on-Capital Gain A return-on-capital gain is a return that one receives from an increase in the value of a capital asset (investment or real estate). The-return-on-capital gain is the measure of the investment gain for an asset holder, relative to the cost at which an asset was purchased. More specifically, return-on-capital gains are a measure
What Is Return on Equity (ROE)? Return on equity (ROE) is a measure of financial performance calculated by dividing net income by shareholders’ equity. Because shareholders’ equity is equal to a company’s assets minus its debt, ROE is considered the return on net assets. ROE is considered a gauge of a corporation’s profitability and how
What Is Return on Innovation Investment? Return on innovation investment is a performance measure used to evaluate the effectiveness of a company’s investment in new products or services. The return on innovation investment is calculated by comparing the profits of new product or service sales to the research, development, and other direct expenditures generated in creating
What Is Return on Investment (ROI)? Return on investment (ROI) is a performance measure used to evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost. To calculate ROI, the
What Is Return on Invested Capital (ROIC)? Return on invested capital (ROIC) is a calculation used to assess a company’s efficiency in allocating capital to profitable investments. The ROIC formula involves dividing net operating profit after tax (NOPAT) by invested capital. ROIC gives a sense of how well a company is using its capital to
What Is Return on Research Capital? Return on research capital (RORC) is a calculation used to assess the revenue a company brings in as a result of expenditures made on research and development (R&D) activities. Return on research capital is a component of productivity and growth since research and development is one of the ways
What Is Return on Revenue? Return on revenue (ROR) is a measure of company profitability based on the amount of revenue generated. Return on revenue compares the amount of net income generated for each dollar of revenue. Return on revenue is one of the most important financial metrics in gauging the profitability of a company.
