ROIC Calculator

About this calculator

ROIC (return on invested capital) is calculated as NOPAT (net operating profit after tax) divided by invested capital — the total debt plus equity a company has deployed to fund its operations, excluding non-operating cash and investments. It measures how efficiently a company converts capital into operating profit, independent of how that capital was financed.

Equity analysts and value investors compare ROIC to a company's weighted average cost of capital (WACC): when ROIC exceeds WACC, the company is creating economic value; when it falls short, it is destroying it even while reporting a profit. Corporate finance teams use ROIC to evaluate whether to fund a new project or acquisition, and business school students use it as a core metric for judging management's capital allocation skill across companies and industries.