Return on Invested Capital Calculator

Formula

To calculate the Return on Invested Capital (ROIC):

\[ ROIC = \left( \frac{R}{IC} \right) \times 100 \]

Where:

$ROIC$ is the Return on Invested Capital (percentage)
$R$ is the Total Return (dollars)
$IC$ is the Total Invested Capital (dollars)

What is Return on Invested Capital?

Return on Invested Capital (ROIC) is a financial metric used to measure the efficiency and profitability of a company's capital investments. It calculates the return generated on the total capital invested in the business. A higher ROIC indicates a more efficient use of capital in generating profit.

Example Calculation

Let's assume the following values:

Total Return ($R$) = $5000
Total Invested Capital ($IC$) = $25000

Using the formula:

\[ ROIC = \left( \frac{5000}{25000} \right) \times 100 = 20\% \]

The Return on Invested Capital is 20%.