Return On Capital Formula in Excel

The Return On Capital formula in Excel with MarketXLS allows you to assess how effectively a company is using its capital to generate profits. By dividing net income by the total capital employed, this function provides valuable insight into a firm's profitability and operational efficiency. Use this quick and reliable calculation to guide your investment decisions and compare company performance across different industries.

Understanding Return On Capital

The Return On Capital metric is a key indicator of how well a company is investing and managing its resources. It typically answers the question: “How much profit is the company generating relative to the capital it has committed?”

• Helps determine management effectiveness in allocating resources
• Useful for comparing different businesses within the same sector
• Gives insights into the overall profitability and sustainability of a company

When to use:

• Evaluating a company's operational efficiency
• Comparing returns on investment across multiple companies
• Identifying well-performing companies in your portfolio

Syntax and Parameters

Use the following syntax to call the Return On Capital function in Excel with MarketXLS:

=ReturnOnCapital(Symbol)

?? Note: If the provided symbol is invalid or your license is not valid, the function will return "NA".

Return Value

The function returns a numeric value representing the return on capital. If data is not available or an error occurs, “NA” is returned.

? Pro Tip: Use valid stock symbols, indices, options, or crypto pairs to ensure accurate data. For example, "MSFT", "^SPX", "@MSFT 110122C00020000", or "BTCUSD:DEFAULT".

Examples and Usage

Below are some common ways to use ReturnOnCapital in Excel:

1. Basic usage with a regular stock symbol:

   =ReturnOnCapital("MSFT")

2. Usage with an index symbol:

   =ReturnOnCapital("^SPX")

3. Usage with an options symbol:

   =ReturnOnCapital("@MSFT 110122C00020000")

4. Usage with a crypto symbol:

   =ReturnOnCapital("BTCUSD:DEFAULT")

?? Note: This function does not take a date parameter. For other functions that accept dates, you can input dates in various formats, such as actual cell references (e.g., =Function(A1)), direct date strings (e.g., =Function("2024-03-15")), or concatenated Excel date functions (e.g., =Function(TEXT(A1,"yyyy-mm-dd"))).

Common Questions

1. Why am I getting “NA” when I use ReturnOnCapital?
   This may be due to an invalid symbol, a licensing issue, or temporarily unavailable data.

2. How frequently is the data updated?
   Data is typically pulled from MarketXLS’s servers in real time or with minimal delay, but refresh rates depend on your subscription level and MarketXLS settings.

3. Does this formula impact spreadsheet performance?
   Calculations are generally fast, but large batches of real-time calls can slow performance. Organizing your queries and limiting redundant calls can help optimize speed.

4. How accurate is the returned value?
   MarketXLS uses reputable data sources, but slight variations may occur based on timing or the data provider.

5. Can I combine this formula with other MarketXLS functions?
   Yes. You can integrate it with other key ratios or metrics to build comprehensive financial models and dashboards in Excel.