Formula
ROIC = NOPAT / Average Invested Capital, where NOPAT = EBIT × (1 − Tax Rate)
How to Interpret
Return on Invested Capital (ROIC) shows how much after‑tax operating profit a company generates for each unit of capital invested in the business. It combines profitability and capital efficiency into one measure. Comparing ROIC with the company’s cost of capital helps determine whether it is creating or destroying value.