Problems › ROIC Is Below Our Cost of Capital
If ROIC sits below the cost of capital, the next dollar of growth makes owners poorer unless mix or price changes. Rank lines by spread, stop reinvesting in sub-cost nodes, and sequence the capital that still clears the hurdle. Growth Portfolio Framework is the engagement. This is not a statutory cost-of-capital opinion and not a valuation for a filing.
If ROIC sits below the cost of capital, the next dollar of growth makes owners poorer unless mix or price changes. Rank lines by spread, stop reinvesting in sub-cost nodes, and sequence the capital that still clears the hurdle. Growth Portfolio Framework is the engagement. This is not a statutory cost-of-capital opinion and not a valuation for a filing.
A company can be busy, growing, even profitable on an accounting row, and still destroy value if the return on invested capital does not clear what the capital costs. The usual disguise is a blended ROIC that looks “about our WACC” while two lines earn well above and the rest sit below. The below-cost lines are often the growth story.
Growth Portfolio Framework (catalog id bcg-v2) is the live engine for owner-value, capital allocation and sequence. EFF will tell you where money is made inside a focused business. Cost & Margin Improvement (t10) will take cost out of a node you have already decided to keep. None of those is a licensed appraisal or an audit of the WACC itself — Percision will use a stated hurdle, not certify one.
This page is for operators and boards, not for PE Scout deal screening. If you are deploying a fund mandate across targets, that is a different door. If you are asking whether this company’s own reinvestment is earning its keep, you are in the right place.
Do not invent a precise WACC on the page. The analysis needs a hurdle the board already uses or a range. False precision here is how a strategy page pretends to be a fairness opinion.
These three together are the signature. One on its own usually points somewhere else.
✓ Growth is a management KPI and ROIC versus hurdle is not reviewed by line
✓ Capital keeps going to the story that is growing rather than the spread that is earning
✓ The board argues about growth rate instead of about which nodes clear the cost of capital
The move that usually makes it worse. Funding the growth plan from the cash of the high-ROIC lines without asking whether the growth itself clears the hurdle.
Percision is the wrong tool if you already know the answer and only need execution capacity, or if the business is pre-revenue — then the constraint is evidence about the market, not analysis of your own figures. Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library. Also wrong if you need facilitation, politics, or someone to sit with a lender or buyer. Those are human jobs.
Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library.
Industry pages at {problem}-in-{industry} ship only with an unedited run excerpt. This canonical has none yet, so there is no eleven-cell grid and no -in-saas door. Home-services operators (HVAC, plumbing, electrical, landscaping, cleaning) hit the same binds as other owner-operated trades: crews fully booked, contribution unknown by job type, and growth that still depends on the owner answering the phone. Percision can analyse that shape of business. There is no /strategy-for-home-services hub yet — industry pages ship only with a named profile and an unedited run excerpt, so this language lives on the operator pages rather than as a twelfth grid.
Related live hubs: strategy by industry. Unedited excerpts, when they exist for this question, will be attached here — we do not reprint another problem’s sample run as if it were this one.
It routes to Growth Portfolio Framework (catalog id bcg-v2), one of 29 engagements. The output is a sequence with a stopping rule — which move first, what it funds next, and the observation that would say it is not working — rather than a list of things you could consider.
Read a complete report before deciding whether it is worth your time.
No. “What is my business actually worth?” is the neighbouring canonical. This page is about whether reinvestment earns its keep. Percision is not a licensed appraiser.
Use the hurdle you already borrow or raise against, stated as an assumption. Waiting for a perfect WACC is how below-cost growth continues for another year.
Stop investing in nodes below the hurdle. Keep investing in nodes above it. A freeze is a different decision — harvest — and it should be made on purpose.
Percision is the wrong tool if you already know the answer and only need execution capacity, or if the business is pre-revenue — then the constraint is evidence about the market, not analysis of your own figures. Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library. Also wrong if you need facilitation, politics, or someone to sit with a lender or buyer. Those are human jobs.
Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library.
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