Return On Capital
topic on 4 shows · 9 statements across 7 episodes
the Knowledge Project 
Capital Allocators 
Top Founders 
20VC
9 statements about Return On Capital, every show
Dorsey: Companies Sustaining 15%+ Returns Over 15 Years Rely on Four Moats
“We had data back to the sixties and looked at every company that had done more than 15% returns on capital for more than 15 years. Totally arbitrary numbers. The idea was, instead of theorizing, let's just get the data. Let's get the companies that have done t…”
Dorsey: Return on Capital Is Increasingly Useless for Evaluating Modern Moats
“Today, I would argue return on capital is less useful. As a touchstone for does a company have competitive advantage? Because if you don't have any capital and your denominator is nothing, it's pretty easy to generate a high ratio, right? It's just math. There…”
Dorsey: High-Return Internal Reinvestment Beats Returning Capital by Lowering Allocation Risks
“If I've got a choice between company A, that is constantly giving me back the money, and then I need to go reinvest it in a super competitive public equity market, or company B, which can plow it back into a 20% return capital internal project, the math is obv…”
Cool: An okay business earns 20% ROIC, a great one earns 50%+
“We typically say, like, an okay business is maybe 20% return on capital. A great business is probably looking at 50% plus in terms of return on capital.”
Jacobs: A Manager Only Manages Return on Capital and Return on Time
“There's only two things a manager manages, return on capital and return on time.”
Jacobs: Return on Time Directly Drives Return on Capital
“When you're a leader, when you're a CEO, or if you're an institutional investor and you're running a team, whether you're running a few dozen people, a few hundred people, or in my case, a 150,000 people, how you channel their time is as important as return on…”
Neman: Sweetgreen Targets Store Payback Faster Than 3-Year Industry Benchmark
“We shoot for significantly higher than that, and I think what allows us to do that, and the reason our return on capital has increased over time, has largely been the efficiency of the boxes due to our digital investment.”
Inker: Long-term equity value loss requires either lower ROIC or shareholder dilution
“The two ways you can lose value in equities from a long-term perspective Is if an event causes a long-term decrease in the return on capital, or if an event causes you as a shareholder to be significantly diluted.”