ROIC (return on invested capital)

Profitability

What the company earns on all the money put into it, by shareholders and lenders alike.

How it is worked out

Operating profit after tax divided by invested capital (equity plus debt less cash).

How to read it

  • A company that earns well above what its capital costs, year after year, usually has something that is hard to copy.
  • The five-year average says more than one year.

Example

After-tax operating profit 150, invested capital 1,000: a 15% ROIC.

Related terms

Related pages

The other pages on US stocks, free to read. On the company pages, the last three fiscal years are open to everyone, five with a free account, and every year with Ploutos Investor.

Explanations of terms for learning, with examples from SEC filings.