Estimating an Entity's Capital Investment, Earnings and Rate-of-Return: An Econometric Approach.

The article proposes a system of measuring net capital investment (NCI), earnings associated with NCI, and rate-of-return on NCI. This study, then, presumes it worthwhile to develop a system of measuring (NCI, E, ROR) in which the measure of NCI reflects its current cash equivalent. One way to arrive at the current cash equivalent of NCI is to measure or estimate the current exit value of each of the entity's owned resources and senior claims, then apply the balance-sheet identity to the resulting numbers.