Return On Invested Capital (ROIC) Calculator

Return on invested capital (ROIC) calculator to determine the return on investment based on EBIT, tax rate, equity, and debt.

Return On Invested Capital Formula

$2600 / $7000 * 100 = 37.143% Return on invested capital is 37.143%.

Nopat Formula

$10,000 * (1 - (1 / 100)) = $9,900.0 Earnings before interest and tax (EBIT) is calculated by removing taxes from EBIT. A Tax rate of 1% means that for every dollar of EBIT, the company pays one cent in taxes.

Invested Capital Formula

$11,000 + $7,900 = $18,900 Invested capital is the total amount of money invested, calculated by adding Equity ($11,000) and Debt ($7,900).

Meaning

The Return On Invested Capital (ROIC) measures the return on investment for a company's total capital employed. It indicates how efficiently a company uses its invested capital to generate profits, comparing it to what is typically expected from a similar asset base. This metric provides insights into a company's ability to create value through its operations and investments.