Measures the return generated on the capital invested in the company.
What it Measures ?
How much profit we earn from the money invested in the business.
Relevant StakeHolders
Investors, CFO
In-depth Use Case / Real-world Example
ROIC is calculated by dividing net operating profit after taxes (NOPAT) by invested capital. If a company has ₹100,000 in NOPAT and ₹500,000 in invested capital, the ROIC is 20%. This metric assesses how well a company generates profits from its capital, helping investors evaluate management's effectiveness.
KPI Definition
Business Value
Movement Direction
Sample Formula
Net Operating Profit After Taxes (NOPAT) / Invested Capital
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