Valuation: Measuring Guide

: A company creates real economic value only when its ROIC exceeds its weighted average cost of capital (WACC).

: For shareholders to earn above-market returns, a company must not just perform well, but outperform the market's existing expectations. Core Measuring Methodologies Valuation: Measuring

: Actions that do not increase cash flows—such as mere accounting changes or "financial engineering"—do not create long-term value. : A company creates real economic value only