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  "documentTitle": "valuation multiples primer",
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  "notes": "Discusses consistency between EV and invested capital, alternative capital definitions, and the relationship to ROIC.",
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      "kind": "callout",
      "text": "Invested capital, unlike book value, excludes non-operating cash",
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      "text": "Replacement capital employed: Capital employed at replacement value, intended to better approximate the cost of replacing the capital base.",
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      "text": "Adjusted capital employed: This is total capital employed adjusted to bring book capital closer to economic capital.",
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      "text": "Formula: EV / Invested Capital = (ROIC - g) / (ROIC * (WACC - g)) * ROIC or (ROIC - g) / (WACC - g)",
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      "text": "Cash flow is better used - in fact is essential - in a discounted cash flow valuation because multi-period cash flow is used instead of a point estimate.",
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