What is ROIC?

[Graybeard]

In finance, return on invested capital (ROIC), is a ratio used to measure the
profitability and value-creation potential of your cash on cash expenditure.​

• In affiliate marketing your costs need to be included as follows:
• Include the cost of your website and servers
• as well as any software used including tools such as trackers,
• VPNs,
• virtual phone numbers,
• virtual credit cards,
• other miscellaneous spending too.
• Then include all paid advertising,
• search engine optimization costs paid for software tools and SEO 'experts' you pay cash to,
• and as well other services that you buy.

However, in affiliate marketing, the value of your time needs to be factored in also.

The formula is: (Your Annual Gross Income / The hours you actually work)

So let's say your time is worth just $20.00 an hour --Add that project time total to find your real ROIC + (T [time])

This is why ROI is very limited to being a comparative value.

So, is what you do worth your time or not?

 

[Honeybadger]

my tradeoff for $100 is 6 hours work
work 30 hours wk
$700 pre tax & $500 post tax
--> $16.60 each hr in the hand

 

[Graybeard]

In the affiliate 'marketing' that you do you don't have an ROI (CPA conversion value/cost of ads)
ROAS (return on ad spend) I have always thought the ROI column a statistical joke.

This is why ROI is very limited to being a comparative value.

You have a cost of time
700/30=23.33 (you would have to report an income and pay taxes on it)

So, your $100 /day profit -- break even on your time is about 3.5 hrs a day working time --you have other expenses --server --internet service (a part of), software: SaaS or software bought and owned (costs amortized).

You cannot deduct your time spend as COGS (Cost of Goods Sold) so that is all taxable. You cannot deduct your time wasted on failed efforts --that is an intangible loss. But still, you lost your time.

Look at this by the month or better, by the Fiscal Quarter (every 3 months). We are all subject to trending --one day does not average to an entire year.

 

[redplanetpk]

Great information about the ROIC