According to Compounding Quality (@QCompounding), a project where the Return on Invested Capital (ROIC) is lower than the Weighted Average Cost of Capital (WACC) results in a net loss, while a higher ROIC than WACC yields solid returns. Specifically, Company A earns a 5% ROIC but pays a 10% WACC, losing money, whereas Company B earns 20% ROIC, outperforming its 10% WACC and generating strong profits. For traders, this highlights the importance of analyzing a company's ROIC versus WACC ratio as a key metric for profitability, which can directly impact stock valuations and, by extension, crypto market sentiment due to cross-market capital flows and risk appetite. (Source: Compounding Quality on Twitter, May 20, 2025)

According to Compounding Quality (@QCompounding), traders should focus on companies where Return on Invested Capital (ROIC) exceeds Weighted Average Cost of Capital (WACC) for true value creation. The analysis highlights that if a company earns 5% ROIC with a 10% WACC, it destroys value, negatively affecting share price and long-term investor returns. In contrast, a company earning 20% ROIC with a 10% WACC compounds wealth, supporting sustainable stock growth and attracting institutional investors. Crypto traders monitoring equity markets can use these metrics to gauge capital inflows and risk sentiment shifts that may impact digital asset liquidity. (Source: @QCompounding, May 20, 2025)