Return on Invested Capital

Home » CMA Glossary Term » Ratios and Performance Metrics » Return on Invested Capital

Return on Invested Capital (ROIC) is a financial performance metric that measures the efficiency and profitability of a company’s capital investments. It is calculated by dividing net operating profit after taxes (NOPAT) by the invested capital, which includes equity and debt. This ratio helps assess how well a company generates returns from its invested capital. Understanding the invested capital definition is crucial for evaluating ROIC.

CMA Prep Course

CMA Exam Academy is a proven, 16-week per part online coaching program to help you pass the CMA. The Academy’s comprehensive curriculum will help you pass the CMA exam and achieve your dreams of earning 6-figures per year, ascend to the executive ranks and earn the respect from your peers.