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To: HeyRainier who wrote (118358)	4/18/1999 12:54:00 PM
From: Chuzzlewit	Respond to of 176388

Good morning Rainier, One of the problems is that there are several different ways to calculate ROIC. The method I favor is to use pre-tax operating earnings as the numerator and the sum of equity plus long term debt as the denominator. Other people subtract some portion of the cash and marketable securities from the numerator. Still others use the average of equity and LT debt from the previous period to the current period as the denominator. Maybe the best method is to use the previous periods assets under management (which excludes goodwill and intangible assets) as the denominator. The point behind all of these variants (and there are still others) is to get a measur for how efficiently a business invests its long-term capital in earnings generating activities. More important that the exact method is consistency. Choose a method with which you are comfortable and stick with it. TTFN, CTC