Result
ROIC
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This calculation is for informational purposes only and does not replace advice from a qualified professional. Formulas and rates may not fit your exact situation — double-check the figures before making decisions.
How it is calculated
NOPAT (Net Operating Profit After Tax) = EBIT × (1 − tax rate). ROIC = NOPAT ÷ invested capital × 100%. It shows how much after-tax operating profit each dollar of capital put into the business — by both owners and lenders — earns.
Unlike ROE, ROIC doesn't depend on how the business is financed — debt or shareholder equity — so it compares operating efficiency across companies with different debt loads more fairly. The classic value-creation signal is ROIC above WACC: the business earns more on invested capital than that capital costs to raise.
The tax rate here is the effective one — the share of profit actually paid — not the statutory rate from the tax code: it depends on reliefs, tax regime and jurisdiction, which is why it's an editable field rather than a constant.