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Sangeetha anandh kumar
Aug 31, 2023, 1:04 PM
as the firm’s margin and represents the strategy's financial success. One metric used to quantify this margin is return on invested capital (ROIC). This metric compares a business's operating income with the capital necessary to generate it. The formula for ROIC is:
Return on Invested Capital = Net Operating Cost After Tax (NOCAT) / Invested Capital (IC)
ROIC tells investors how successful a company is at turning its investments into profit. By raising WTP, a company can risk increasing prices, thereby increasing firm margin. Business leaders can also increase this metric by decreasing their costs. For example, sustainability initiatives—in addition to raising WTP—can lower production costs by using fewer or more sustainable resources. By focusing on the triple bottom line, a firm can simultaneously increase customer delight and margin
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