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Stocks

Return on Capital (return on invested capital)

When discussing a company's financial health, we often refer to its after-tax income, which is the earnings remaining after all taxes have been paid. This can be calculated by taking the total income over the past 12 months and subtracting any tax payments. We then divide this figure by the sum of the company's shareholder's equity, long-term debt, and other long-term liabilities. This calculation gives us a measure of the company's profitability and leverage.

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