Operating profit divided by invested capital (debt + equity).
ROIC is widely considered the purest measure of business quality. ROIC consistently above the cost of capital signals true value creation. Companies with sustained high ROIC are typically those with deep moats.
Operating profit divided by invested capital (debt + equity). ROIC is widely considered the purest measure of business quality. ROIC consistently above the cost of capital signals true value creation. Companies with sustained high ROIC are typically those with deep moats.
In financial metrics, ROIC (Return on Invested Capital) is one of the building blocks investors use to compare opportunities and assess risk. Understanding it helps you read research notes, earnings reports, and market commentary without getting lost in jargon.
ROIC is widely considered the purest measure of business quality. ROIC consistently above the cost of capital signals true value creation.
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