ROIC vs ROE vs ROCE vs ROA vs ROI: Which return ratio matters most for investors?

https://www.youtube.com/watch?v=jA_neD-djSs

Confused by ROIC, ROE, ROCE, ROA, and ROI?

In this video, Ben Tan breaks down these five important return ratios in simple terms so you can understand what they mean, how they differ, and which ones matter most in fundamental analysis.

Ben explains how investors can use return on invested capital, return on equity, return on capital employed, return on assets, and return on investment to better analyse a company.

Ben also explains why he focuses mainly on ROE and ROIC when evaluating stocks, and how to think about these metrics over time instead of looking at just one year of data.

You will also learn why it is important to compare return ratios within the same industry, why consistency over five years matters, and why ROIC should be higher than WACC when assessing whether a business is truly creating value.

In this video, we cover:

• What ROIC means and how it measures returns on invested capital

• The difference between ROIC vs ROCE

• What ROE tells equity investors

• Why ROA matters more for banks and insurance companies

• How ROI is different from the other return metrics

• Why WACC matters when using ROIC

• A real example using Microsoft’s ROE and ROIC

If you are interested in stock investing, value investing, fundamental analysis, financial ratios, quality businesses, and learning how to analyse stocks, this video is for you.

At CapStacked, we create content to help you think better about investing, business quality, and wealth building through clear and practical explanations.

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