Measure how efficiently a company turns its capital base into after-tax operating profit. ROIC = NOPAT / Invested Capital. Pick a ticker to auto-populate, or enter your own NOPAT and capital figures.
Inputs
Cash tax rate = income tax / pre-tax income
Result
ROIC iROIC (Return on Invested Capital)How efficiently a company turns the capital it has raised into profits, after tax.ROIC = NOPAT / Invested Capital
0.00%
WeakEnter inputs to compute
What this means. Likely destroying value vs. cost of capital.
Reference
Every input and output on this page, explained in plain English. Hover the info icons in the calculator above to see the same content inline.
How efficiently a company turns the capital it has raised into profits, after tax.
Formula
ROIC = NOPAT / Invested Capital
How to read the result
Strong5/5
Comfortably above typical cost-of-capital.
Acceptable3/5
Around average; check trend and WACC.
Weak1/5
Likely destroying value vs. cost of capital.
Operating profit adjusted for taxes — what the company would earn with no debt.
Formula
NOPAT = EBIT × (1 − tax rate)
The capital base on which ROIC is computed.
Formula
Invested Capital = Total Debt + Equity − Cash
A blended cost of financing across equity and debt, weighted by their share of total capital.
Formula
WACC = (E/V)·Re + (D/V)·Rd·(1 − t)
How to read the result
Low cost of capital5/5
Cheap funding base — easier to clear the hurdle.
Around market3/5
Typical for a US large-cap; ROIC must comfortably exceed this.
High cost of capital1/5
Expensive funding — requires high returns to create value.
FAQ
ROIC accounts for both equity and debt financing — it shows how productively the entire capital base is being used, not just shareholder equity. It cannot be flattered with leverage the way ROE can.
Educational tool only. The outputs above are produced by a deterministic formula from the values you enter. They are not a recommendation to buy, hold, or sell any security and are not investment advice. Always do your own research and consider consulting a licensed advisor before making investment decisions.
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