Return on Invested Capital (ROIC)

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StreetInsider.com  Feb 24  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Earnings/Retail+Opportunity+Investments+Corp.+%28ROIC%29+Reports+In-Line+Q4+EPS/9208270.html for the full story.
DailyFinance  Feb 20  Comment 
TORONTO, ONTARIO -- (Marketwired) -- 02/20/14 -- The following corrects and replaces the release sent at 3:21 PM ET on February 20. The calculation of the return of capital to shareholders has been corrected from $0.492 per share to $0.0492 per...
DailyFinance  Dec 9  Comment 
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 12/09/13 -- Deans Knight Income Corporation (the "Company") (TSX: DNC) announces the cancellation of the special meeting of holders ("Shareholders") of voting common shares of the Company ("Voting...
OilVoice  Aug 9  Comment 
PetroCorp Group Inc. NEX BOARDPCG.H announces that it has declared a return of capital on its outstanding common shares the quotCommon Sharesquot of 0.0145 per share. The total return of cap
Benzinga  Jun 20  Comment 
Retail Opportunity Investments Corp. (NASDAQ: ROIC) announced today that Standard & Poor's Ratings Services has assigned a BBB- corporate credit rating to ROIC with a stable outlook. According to the Standard & Poor's report, the rating...
Forbes  May 9  Comment 
The directors of a company tend to have a unique inside view into the business, so when directors make major buys, investors are wise to take notice. Presumably the only reason a director of a company would choose to take their hard-earned cash...
TheStreet.com  May 6  Comment 
NEW YORK (TheStreet) -- In two weeks I will be attending the annual International Council of Shopping Centers RECon global conference in Las Vegas. While there, I will be conducting interviews with many leading retail REIT CEOs and other industry...
StreetInsider.com  Jan 14  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Upgrades/Goldman+Sachs+Upgrades+Capital+One+Financial+%28COF%29+to+Buy%2C+Sees+Return+of+Capital+as+Next+Driver/8004614.html for the full story.
StreetInsider.com  Nov 28  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/AOL+Inc.+%28AOL%29+Special+Dividend+to+Be+Taxed+as+One-Time+Return+of+Capital/7907171.html for the full story.
StreetInsider.com  Nov 1  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Earnings/Retail+Opportunity+Investments+Corp.+%28ROIC%29+Tops+Q3+EPS+by+4c/7834338.html for the full story.




 
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Return on Invested Capital (ROIC) is used to judge how well companies generate earnings from capital invested in their business. It is essentially the return a company earns on each dollar invests in itself. ROIC is defined as Net Operating Profits Less Adjusted Taxes (NOPLAT) divided by the sum of Working Capital and fixed assets. Return on capital invested is a key driver of a business value (the higher it is, the higher the value) as it represents the return a company earns on its projects relative to its cost of capital.

ROIC = NOPLAT ÷ (Working Capital + Fixed Assets)


- Or -


ROIC = (EBIT * (1-T)) ÷ (Working Capital + Fixed Assets)


When a company's return on invested capital is greater than their cost of capital (commonly measured as the weighted average cost of capital, or WACC) they are creating value by investing in their projects. When this is not the case and company's WACC is greater than their ROIC they are said to be destroying value by investing capital in their business.

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