There is no shortage of ways to determine the financial health and operational performance of a company. But one of the top ways that people like to determine this is by using ratios, ratios, and more ratios.
One of the best ratios is called Cash Return on Gross Investment (CROGI), and not just because it has an awesome acronym that is almost "corgi." It provides a measurement of just how much cash flow is generated by every dollar invested into the company. Which is why it’s also sometimes called “Cash Flow Return on Investment.”
If it reminds you at all of Internal Rate of Return (IRR), then you know finance well. This measurement is based on the metrics of IRR.
To determine CROGI, divide the company’s gross operating cash flow before interest and taxes by the company’s capital employed (operating assets less its interest-free capital.)
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Finance: What Is a Real Return?67 Views
finance- a la shmoop. what is a real return? like is there a fake return? you
know like the news? well kinda .real return refers to an [man frowns talking to camera]
investment return mapped against inflation. so let's say you invest in a
bond that pays five percent a year for ten years and then pays you back your
principal .boring but nice- you know like a good doctor visit. your nominal return
over that period was 5% but since inflation was 3% a year during that
period on average your real return was only 2% a year- meaning that the
performance of your investment only eked out a 2% net gain against the price of [equation]
milk gas and you know knocked off iPhones. so don't be a chump who thinks
that they're making more money than they really are, and you know keep on keeping
it real. [man sitting in chair, talks to camera]
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