Return on Invested Capital (ROIC) reflects the ratio of tax-adjusted operating income (NOPAT) to the average annual amount of invested capital
ROIC = NOPAT / Invested Capital,
NOPAT = Operating profit * (1-TRP),
NOPAT = Net operating income after tax
TRP - Tax Rate Profit
It is a profitability or performance ratio that aims to measure the percentage return that a company earns on invested capital. The ratio shows how efficiently a company is using the investors’ funds to generate income. The higher the ROIC, the more efficient the company is.
Return on invested capital can be applied in the following cases:
1. When comparing companies from the same industry
2. When analyzing the dynamics of the ROIC indicator within one company
According to Ranks methodology, this indicator is analyzed in the Financial position block and used along with other indicators to calculate the score.
Aghasi Khanjyan street, 50, Yerevan, Armenia, 0025
Marr street, 16, apt. 5, Yerevan, Armenia, 0079
Loutrakiou, 5, CHARA VENEZIA BUILDING, 1st floor, Office 101, Nicosia, Cyprus, 2027
Zolotukhin & Partners corporation LTD
LLC "Ranks AAA" does not provide brokerage services and does not take funds into trust management.
Legal Entity Code:53125283 Insurer code: 43715106 registered in Ministry of Justice Republic of Armenia.
© «RANKS» 2022. All rights reserved