Alcoa Invested Capital vs Earnings before Tax Analysis

    Invested Capital vs Earnings before Tax

    Invested Capital

    Invested capital represents the total cash investment that shareholders and debt holders have contributed to Alcoa Corporation. There are two different methods for calculating Alcoa invested capital: operating approach and financing approach. Understanding ##company1# invested capital allows investors to to calculate measures of performance such as return on invested capital or return on capital employed. Invested capital is an input into the calculation of Return on Invested Capital, and is calculated as: Total Debt plus Total Assets minus Goodwill and Intangible Assets minus Cash and Equivalents minus Current Liabilities. Please note this calculation method is subject to change.

    Earnings before Tax

    Earnings Before Tax is calculated by adding Income Tax Expense back to Net Income.

    Accounts Relationship

    Invested Capital vs Earnings before Tax

    Significance: Weak Contrarian Relationship

    Overlapping area represents amount of trend that can be explained by analyzing historical patterns of Alcoa Invested Capital account and Earnings before Tax

    Correlation Coefficient

    -0.12
    Relationship DirectionNegative 
    Relationship StrengthInsignificant