Robert A. Bonavito, CPA PC

RABCPA PC Blog

Return On Invested Capital

If someone was to ask me for one matrix that best describes how successful a company is, it would be Return On Invested Capital (ROIC). This ratio gives you a strong glimpse of how the business is operating in a competitive market. It simply gives you the return or as I like to say it’s price - cost /capital. Michael Porter, the Harvard business professor in his book competitive strategies list five forces that define an industry. They are, barriers to entry, substitution threat, buyer power, supplier power, and competition rivalry.  If you want to understand how well a company is doing in its industry simply take a look at its Return On Invested Capital and compare it to its competitors.

Posted June 10, 2017 by Robert A. Bonavito in Educational Videos

Predicting the movement in the stock market

Most of the top professionals in the investment community have proprietary methodologies that help them predict the trends of the market. These are very complex but it can be broken down simply by looking at the spread between the 10 year and 2 year bond yields.  The spread of this bond tells you whether people are nervous about the future or optimistic. Generally, if the spread on the two and 10-year bond is contracting it means people are pessimistic and we may be heading towards a recession, however if the bond spread is increasing it means that people are very optimistic about the future and the stock market will be increasing.

Posted May 26, 2017 by Robert A Bonavito in Educational Videos

12. Thinking of Changing Your Residence for Tax Reasons

Many people in the Northeast want to relocate to a low-cost state in order to reduce their living expenses and avoid high taxes. They still however, want the benefits of living in the Northeast that includes the great climate, unlimited entertainment, best doctors etc. Essentially, they want the best of both worlds, low taxes with a great lifestyle.  In order to determine residency, the government looks at several factors such as voter registration, car insurance, licenses, and credit card bills. Most people feel just changing your voter registration is enough, but all you have to do is look at their bank statements and credit card bills and you’ll see that they spend most of their time in the Northeast. The rules regarding residence can be complicated, so plan carefully.

Posted May 10, 2017 by Robert Bonavito CPA in Tax Services