### An interesting question.

Here is an interesting question for the readers...

Investors regard Return on capital employed(ROCE) or Return on capital invested (ROIC) an important metric to gauge business quality.

Right?

In fact , Joel Greenblatt also uses this in his magic formula.

The question is :

__Can a negative ROCE/ROIC be a good thing ?__

__if yes , how ?__

And although there are many ways to calculate ROCE/ROIC

for this question we would stick to : EBIT / Invested capital

where invested capital is : net fixed assets + net working capital

The answer is very simple but only if you have really __grasped __the concept.

Please email me your answer at narang.gp(at)gmail.com

I will post the best email on this blog.

Next week.