ROIC

The component measures of ROIC are

both industry and organization specific,

and as such, the ratios can be seen as r
eflections of a business organization's s
trategy; relative to its competitors cons
equently, a business organization can s
et internal goals and controls regarding
the measures that will enhance ROIC a
nd lead to the creation of value.

FCF
Calculation reveals a business organizati
on's actual cash available for operations.

As a performance measure, it is supe

rior to net profit in predicting the organ
ization's short-term financial welfare.

 FCF is the actual cash on hand, after ad

justments have been made for noncas

h, but tax-deductible, expenses such as
FCF is greater than the organization's t
otal cash requirements for both credito
rs and shareholders, the organization
will remain solvent.