Return on Capital

Return on Capital - Return on Capital is just what it implies, the return you benefit from through the practice of investing cash capital. It is a general practice used by many corporations that participate in that corporation's activities to generate a cash flow through investment practices and, tax sheltering. Just as stock gain and, lose value on any given day, the same applies to cash flow investments. As the capital invested increases in value over the initial amount invested the company is in better standing. When the capital invested decreased in value of the initial amount invested that same value is considered destroyed.