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Cash return on cash invested[1] (CROCI), or cash return on capital invested,[2] is an advanced valuation multiple. This ratio compares a post-tax, pre-interest operating cash flow to gross cash invested by all security-holders and is a useful measure of a company’s ability to generate cash returns on its investments.

The ratio is similar to ROE ratio, but CROCI is calculated on a cash basis and on an EV-basis, taking into account all the company's security-holders.




  • DACF (Debt-adjusted cash flow) = EBITDA*(1–tax rate) + other investment gain after tax
  • GCI (Gross cash invested) = Gross tangible and intangible assets before depreciation or write-offs + investments in associates + working capital[4]


  • The (CROCI – WACC) spread is a key measure of shareholder value creation and competitive advantage. If the spread is positive, a company creates value and destroys it otherwise.
  • The CROCI/WACC ratio is basically the same metric signaling value creation or destruction. If the ratio is higher than 1, a company creates value, and it destroys value if the ratio is below 1.


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