We derive GAAP Net Income, Core Earnings, NOPAT, Invested Capital, Economic Earnings, and Free Cash Flow by summing the individual values for each company in the sector/industry.
We calculate ROIC and WACC as market-weighted values relative to each respective sector/industry. Details below:
- Company weight equals the company’s market cap divided by the market cap of the sector/industry.
- We multiply each company’s ROIC or WACC by its weight.
- The sector/industry ROIC and WACC equals the sum of the weighted ROIC or WACC for all the companies in the sector/industry.