The higher the return on capital which he defines as pretax operating profit divided by the sum of net working capital and net fixed assets the more effectively a company is using its capital to generate profit.

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Clearwire said it will use the net proceeds for general corporate purposes and working capital purposes.

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We plan to use the net proceeds that we receive in this offering for working capital and general corporate purposes, including possible acquisitions of, or investments in, businesses, technologies or other assets.

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He scours Asia for enterprises that sell into large and expanding markets and have high or rapidly rising returns on equity, strong free cash flow (meaning net income plus depreciation minus capital expenditures, adjusted for working capital) and a focused long-term strategy.

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Investors know of course that lower revenue and more working capital in the months ahead equates to a lower enterprise value (equity plus net debt).

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