Return on Invested Capital

Common profitability ratios used by analysts include ROA, ROE and ROI, AND ROIC

The return on invested capital (ROIC) ratio helps us understand how well the company is using its capital to generate profit. Analysts also use the ROIC as a benchmark to compare its value to other companies.

A simple way to calculate the ROIC is to divide the net operating profit after tax by the invested capital.

ROIC= (Net income- Dividend)/ (Debt +Equity)

As there are many other ways to calculate the ROIC, let us know how you calculate it.