Return on Invested Capital


ROIC. A measure of how effectively a company uses the money (borrowed or owned) invested in its operations. Calculated by: net income after taxes / (total assets less excess cash minus non-interest-bearing liabilities).

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The return on invested capital was there because we needed a way to see how effectively we were using our cash.

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You should try to make sure that you know what your return on invested capital will be so you know if it is worth pursuing.

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He realized that his Return on Invested Capital was rather weak because he had let the overhead costs of the new factory overpower the gains he had made.

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Return on Capital ROC