| A measure of the worth of a companys ongoing operations. A company's value is sometimes measured in terms of the total funds being used to finance it. This investment ratio is used in place of the price/earnings ratio in the analysis of certain types of companies. It indicates the economic rather than accounting return that the company is generating on the total value of the capital supporting it. Typical companies for which this ratio is appropriate are those that have borrowed heavily to finance growth or those that have paid large premiums for acquisitions or assets.
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