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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (52029)	8/8/2013 4:46:10 PM
From: IndependentValue	Read Replies (1) \| Respond to of 78671

Paul thanks for your response on ROIC. I understand that using a ROIC metric is a little cumbersome given the additional effort required in calculating it, particularly where there are a wide number of comparable companies to a potential investee company, but given that all investors should be doing their own homework anyway, is calculating ROIC really that much of an additional effort if one is sorting through 10-Ks for a number of years anyway? I also think that ROE is quite open to manipulation, more so than ROIC, given that it relies on net income and net assets (ie. book value of equity), which can both reflect all sort of accounting trickery that mask economic reality (and not forgetting the need to check a second ratio, D/E, if using ROE). To me ROIC seems worth the effort! Just my view though.