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1- Why is return on invested capital one of the most relevant
measures of company performance? How do we use this
measure in our analysis of financial statements?
2- Why is interest expense ignored when computing return on
net operating assets (RNOA)?
3- What is the major difference between return on net operating
assets and return on common equity?
4- How is the equity growth rate computed? What does it
measure?

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1- Why is return on invested capital one of the most relevant measur

  • 1. 1- Why is return on invested capital one of the most relevant measures of company performance? How do we use this measure in our analysis of financial statements? 2- Why is interest expense ignored when computing return on net operating assets (RNOA)? 3- What is the major difference between return on net operating assets and return on common equity? 4- How is the equity growth rate computed? What does it measure?