Download your Word document
Residual Income and Capital Charge result sheet — free, supported by sponsors. Your download button appears in 20 seconds.
This free download is supported by sponsors — continuing in
20
Your file is generated in your browser when you choose Download — nothing is uploaded. If this calculator returns enough numeric data, the export also includes its best-fit chart alongside the readable table.
WorldCalculate result export
Residual Income and Capital Charge — result sheet
Measure income left after applying a required return to an invested capital base, with the implied return and value spread shown together.
Inputs used
Results
Visual chart
Breakdown
Calculation steps
Returned data table
Formula and methodology
Formula: Capital charge = invested capital×required return; residual income = operating income − capital charge; implied ROI = operating income/invested capital.
Residual income asks whether an operating segment or project earns more than the dollar return required on the capital assigned to it. The capital charge converts the required percentage into currency units, and residual income shows the remaining spread. This does not decide whether the chosen income or capital definition is appropriate; organizations may use different operating-income, investment-base, book-value, or market-value conventions.
This result follows the calculator's declared inputs, precision, validation boundaries, and model limits.
Input contract
- Operating or segment income — currency units; minimum -1000000000000; maximum 1000000000000
- Invested capital — currency units; minimum 0.01; maximum 1000000000000
- Required return — %; minimum 0; maximum 100
Worked example
| Input | Value |
|---|---|
| Operating or segment income | 150000 |
| Invested capital | 1000000 |
| Required return | 10 |
The capital charge is 100,000, residual income is 50,000, and implied ROI is 15%, a 5-point spread above the hurdle.
Assumptions and limits
- Income and invested capital are measured for the same segment, project, and period.
- The required return is supplied as a percentage and is applied once to invested capital.
- Invested capital is positive and does not change during the modeled period.
- The calculator reports arithmetic residual income and does not adjust accounting numbers.
- A negative residual income means income is below the entered capital charge under this definition.
- Interpretation depends on the organization’s approved accounting and investment-base policy.
Calculator note
Source and methodology
Use the official WorldCalculate methodology policy for the source, formula, precision, and boundary standards behind this calculator.
Planning estimate, not financial, medical, legal, or professional advice. © WorldCalculate — reuse with attribution. Built and curated by Hassan ALRowaie.
No saved result was found. Please run the calculation first, then choose Download again.