Definition
ROIC is a financial ratio that measures the return a company generates on its capital invested in the business, calculated by dividing net operating profit after taxes (NOPAT) by total invested capital.
Related Services
Capital management, investment analysis, and strategic planning services help businesses optimize their ROIC by focusing on profitable investments and efficient capital deployment.
Problem and Application
ROIC is an important metric for assessing value creation, as companies must earn a higher return than their cost of capital to generate value for shareholders.
Conclusion
ROIC is a key performance indicator for determining how well a company utilizes its capital to create value and generate profitable returns.
