Page 59 - New Employee Glossary

Glossary 59

indication of the company's efficiency; in other words, how much profit it is able to generate
given the resources provided by its stockholders.

Return on Invested Capital (ROIC)

A measure of the return a company is able to generate on investments. ROIC is calculated
as (after-tax operating profit) divided by (total invested capital). Invested capital is calculated
as operating assets (e.g., plants, inventory, accounts receivable, etc.) less operating
liabilities (e.g., accounts payable). A company with a ROIC of 50% is able to generate $0.5 of
annual after-tax operating profit for each $1 it has invested in the business, while a
company with an ROIC of 25% is able to generate only $0.25 of annual after-tax profit for
the same amount of investment.

Return on Investment (ROI)

A measure of a corporation's profitability, equal to income divided by common stock and
preferred stock equity plus long-term debt. ROI measures how effectively the firm uses its
capital to generate profit; the higher the ROI, the better.

Revenue

Sales. Increase in the assets of an organization or decrease in liabilities during an
accounting period, primarily from an organization’s operating activities. Generally, the
amount received by a company for goods sold or services provided; may also include
earnings from interest, dividends, lease income, and royalties.

Rheumatoid Arthritis (RA)

An inflammatory disorder that typically affects the small joints in your hands and feet.

Risk Evaluation & Mitigation Strategy (REMS)

Required risk management plans that use risk minimization strategies beyond the
professional labeling to ensure that the benefits of certain prescription drugs outweigh their
risks.

ROW (Rest of World)

Countries other than the US

Royalty