Some goon is trying to patent a formula to calculate incremental ROICs.

Via a coworker: Some goon is trying to patent a formula to calculate incremental ROICs.

http://www.freepatentsonline.com/20060095352.pdf

For those in the know, this is laughable.

For those soon-to-be in the know, ROIC stands for Return On Invested Capital, a frequently used formula with quite a few different ways to calculate it actually.  One common method is to divide Net Operating Profit After Taxes (NOPAT) by Invested Capital (proxied by Net Debt + Equity). Incremental ROIC therefore just refers to the incremental profit earned on newly invested capital, or the added return due to additional investment.

Confused? Thankfully, this guy provides this totally obvious helpful flow chart (click to zoom):

Noooooow I get it.

Noooooow I get it.

The point is that this is like trying to patent Sales Minus Costs = Profit. Actually...is there a patent on that yet?

Brb

Filed under: Uncategorized

Tags: finance, markets

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