Cash Return On Gross Investment (CROGI)

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Definition: Cash Return On Gross Investment (CROGI)

This ratio conveys us how much cash flow it is generating as a result of its capital investments.

Like the name says, it is calculated as

CROGI = Gross cash flow after taxes / Gross Income

This ratio is used by the companies to understand how efficiently the money they invested in capital purchases is being used. Companies use this ratio to evaluate their performance & growth. The higher the ratio means the company is generating good revenues. However, lower ratios mean the investments are much higher than the revenues & the company needs to look into its business.

Various parameters like revenues, expenses, debt and taxes etc are used for calculations.


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