Internal rate of return (IRR) is the discount rate that makes the net present value of all cash flows (both positive and negative) equal to zero for a specific project or investment. What Is Internal Rate of Return Used for?The internal rate of return is used to evaluate projects or investments.
Net profit margin is a metric that indicates how well a company can transform its revenues into profits.Net profit margin is the percent of revenue remaining after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from a company's gross or total revenue.
Return on capital (ROC) is a ratio that measures how well a company turns capital (e.g.debt, equity) into profits.
Return on equity (ROE) is a measurement of how effectively a business uses equity – or the money contributed by its stockholders and cumulative retained profits – to produce income.In other words, ROE indicates a company’s ability to turn equity capital into net profit. You may also hear ROE referred to as “return on net assets.” A high ROE suggests that a company’s management team is more efficient when it comes to utilizing investment financing to grow their business (and is more likely to provide better returns to investors).
ROI (or return on investment) measures the gain/loss generated by an investment in relation to its initial cost.ROI allows the reader to gauge the efficiency and profitability of an investment and is often used to influence financial decisions, compare a company’s profitability, and analyze investments.
In investing terms, WACC shows the average rate that companies pay to finance their overall operations.WACC is calculated by incorporating equity investments from the sale of stock, as well as any operational debt they incur (with respect to the firm’s enterprise value). WACC shows how much a company must earn on its existing assets to satisfy the interests of both its investors and debtors.