A
Glossary
Return on Invested Capital
Also: ROIC
Essential — core valuation theory
What it measures
Return on all the money invested in the business. Over 15% exceptional; can't be faked by borrowing.
Formula
NOPLAT ÷ Invested Capital (equity + debt − spare cash)Benchmark
> 15% strong · compare to WACC
Related metrics
Source
McKinsey, Valuation (7th ed.) ch. 5