Alcoa Earnings before Tax vs Invested Capital Analysis

    Earnings before Tax vs Invested Capital

    Earnings before Tax

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

    Invested Capital

    Invested capital represents the total cash investment that shareholders and debt holders have contributed to Alcoa Inc. There are two different methods for calculating Alcoa Inc 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.
    Accounts Relationship
    Earnings before Tax vs Invested Capital

    Significance: Significant Contrarian Relationship

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

    Correlation Coefficient

    -0.22
    Relationship DirectionNegative 
    Relationship StrengthInsignificant