Financial Ratios
Return on Invested Capital
Definition
What is Return on Invested Capital?
After-tax operating profit divided by capital invested in operations.
Example in practice
How This Looks in Practice
A company earning 18% ROIC against a 12% cost of capital creates value.
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Related Terms
Financial Ratios
Gross Margin
Gross profit expressed as a percentage of revenue.
Financial RatiosOperating Margin
Operating profit expressed as a percentage of revenue.
Financial RatiosEBITDA Margin
EBITDA expressed as a percentage of revenue.
Equity ValuationEarnings Per Share
Net income attributable to ordinary shareholders divided by weighted average ordinary shares.