Metric Library

What is Economic Profit Spread (ROIC − WACC)?

The difference between ROIC and WACC. Positive spread (Value Creation): company earns more than its cost of capital — growing the spread over time drives stock appreciation. Negative spread (Value Destruction): every dollar of capital invested is worth less than it cost. The wider the positive spread, the stronger the competitive moat.

Live example: AAPL

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