Insert the information in the form and the calculator will determine the return on invested capital.

What is the return on invested capital?

Return on invested capital (ROIC) is a calculation that companys use to assess their efficiencuy in allocating capital to profitable investments.

How to calculate return on invested capital?

To calculate return on invested capital you should use the following formula:
return on invested capital = net operating profit after tax (NOPAT) / invested capital

example: company x generated $13,000,000 in profits and invested an average of $140,000,000 calcualte the return on invested capital of the company?

Using the return on invested capital formula the answer will be:
return on invested capital = NOPAT / invested capital
return on invested capital = $13,000,000 / $140,000,000
return on invested capital = 0.0928

Why use return on invested capital?

Companies use ROIC because it can tell of how a company is using it's capital to gerate profits. Comparing a company's ROIC with it's weighted average cost of capital (WAAC) reveals if invested capital is being used effictively.