Business, Legal & Accounting Glossary
Return On New Invested Capital (RONIC) is a figure used to determine the amount of return that a firm could earn on additional contributed capital.
Return On New Invested Capital (RONIC) is a calculation used, either by a firm or investors, to determine the amount of return that a firm could earn on additional contributed capital. The calculation measures the return generated when a company converts its capital into capital expenditures, which generate revenues from core operations. A higher RONIC equates to a relatively efficient firm.
Profit growth can be calculated by multiplying the Reinvestment Rate (%) by the Rate of Return (RR). The RR is equivalent to RONIC.
RONIC
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This glossary post was last updated: 22nd March, 2020 | 0 Views.