5 Questions
What does the Reinvestment Rate measure?
Percentage of after-tax operating income allocated to CapEx and NWC
What is the calculation for net CapEx?
Capital expenditures - Depreciation
What is the formula for Return on Invested Capital (ROIC)?
$ROIC = \frac{NOPAT}{Total,Invested,Capital}$
What does the expected growth rate in operating income depend on?
Reinvestment rate and ROIC
What is the three-step process for calculating the reinvestment rate?
Calculate net CapEx, add change in NWC, divide by tax-affected EBI
Test your knowledge of valuation approaches and the concept of reinvestment rate with this quiz. Learn how to calculate the reinvestment rate and its impact on a company's growth.
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