ROIC Calculator


Why use the ROIC calculator?

ROIC  calculator ROIC, or return on invested capital, is a financial metric used to measure a company's profitability based on the amount of capital invested. It is a very important way to measure how well a company uses its resources to make money.A high ROIC means a company gets a good return on the money it invests, while a low ROIC implies that the company isn't making the best use of its resources.


How  to finds ROIC?

To calculate ROIC, you need to know the company's net income, total capital invested, and the average total capital invested over the studied period.

The Roic formula is:
ROIC equals (Net Income / Average Total Capital Invested) multiplied by 100.
For example, let's say a company has a net income of $500,000, a total capital investment of $1,000,000, and an average total of $900,000 over a specific period. The ROI would be:
ROIC = ($500,000/$900,000) x 100 = 55.56%
This means that the company generates a 55.56% return on the capital invested.
It's important to remember that ROIC is not a stand-alone metric. It should be used with other financial metrics, like return on equity (ROE) and return on assets (ROA), to get a full picture of a company's economic performance. Additionally, it is essential to compare ROIC to industry averages to see how the company performs compared to others in the same industry.
In the end, the ROIC calculator is a useful tool for figuring out how profitable a business is based on how much capital it has invested. It is an important metric for investors and analysts to look at when figuring out how well a company is doing financially. By comparing ROIC to industry averages and other financial metrics, you can see how well a company uses its resources to make money.


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