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Here's a link to an article where TMF Ralegh discusses Return on Invested Capital (ROIC). Scroll down it and he gives links to several series of articles he's written on this kind of analysis.

If you're just asking for a simpler formula, how's this explanation:

Let's say you invested $1,000 4 years ago and it's grown to $3,500. To figure the gain, you divide 3500 by 1000 and get 3.5. To see what that is per year, on average (i.e. annualized), you need to take the 4th root of 3.5. This gives you 1.37. Meaning you're earning about 37% per year.

On my calculator, I have to raise 2.5 to the (1 divided by 4)th power to get the answer. So I punch in:


Hope that helps!

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