Return on Invested Capital ROIC
The after-tax operating return a company earns on all the capital (debt plus equity) invested in its business.
What it is
Return on invested capital measures how much after-tax operating profit a company generates relative to the total capital, both debt and equity, that funds its operations. It uses NOPAT (net operating profit after tax) over invested capital, so it captures the productivity of the whole capital base regardless of financing mix. ROIC is widely regarded as one of the cleanest measures of how well a company turns capital into profit.
Why it matters
ROIC matters most when compared to a company's cost of capital (WACC): a business creates value only when ROIC exceeds the cost of the capital it uses, and destroys value when it does not. A durable, high ROIC is a strong sign of a competitive moat. The main pitfalls are that invested capital can be defined several ways and that goodwill from acquisitions can distort the figure, so consistency in calculation matters.
How it's calculated
Divide net operating profit after tax (NOPAT, roughly operating income times one minus the tax rate) by invested capital, which is total debt plus equity less excess cash.
How Quintarthai uses it
ROIC is part of the profitability ratios on a company's deep-analysis page and feeds Quinn's quality and moat assessment, where every figure carries a click-to-source provenance receipt.