Module+12000+XVI+Formulas

XVI. Module 12000 Formulas amb


 * __Return on Investment (ROI)__**

Three Different Ways to Calculate:

1) ROI = Operating Income / Average Operating Assets

2) ROI = (Operating Income / Sales) * (Sales / Average Operating Assets)

3) ROI = Operating Income Margin * Operating Asset Turnover


 * __Residual Income (RI)__**

Residual Income = Operating Income – (Minimum Rate of Return * Operating Assets)


 * __Economic Value Added (EVA)__**

EVA = After-Tax Operating Income – (Weighted Average Cost of Capital * Total Capital Employed)


 * __ Cycle Time __**

Cycle Time = Time / Units Produced


 * __Velocity__**

Velocity = Units Produced / Time


 * __Manufacturing Cycle Efficiency (MCE)__**

MCE = Processing Time / (Processing Time + Move Time + Inspection Time + Waiting Time + Other Non Value Added Time)

**__Additional Formulas__**

Average Operating Assets = (Beginning Assets + Ending Assets) / 2 Operating Income Margin = Operating Income / Sales Operating Asset Turnover = Sales / Average Operating Assets Residual Return on Investment = RI / Average Operating Assets

After- Tax Cost of Debt = Cost * (1 – Tax Rate)