Return on Invested Capital
Definition
A profitability ratio measuring how efficiently a company generates returns from its invested capital (debt + equity). ROIC above WACC indicates value creation for shareholders.
Formula / Rules
NOPAT / Invested Capital
Example
NOPAT of $150 million on $1 billion invested capital equals 15% ROIC.
Related Terms
Frequently Asked Question
What is Return on Invested Capital (ROIC)?
Return on Invested Capital (ROIC) measures how efficiently a company uses its total capital to generate profit. A ROIC above WACC signals genuine value creation; below WACC signals value destruction.
APA Citation
Last updated:
· Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.