ROIC Calculator
Calculate ROIC step by step: ROIC = NOPAT ÷ invested capital, where NOPAT = EBIT × (1 − tax rate).
In short
Formula: ROIC = NOPAT ÷ invested capital, where NOPAT = EBIT × (1 − tax rate).
What this calculator does
Calculate ROIC step by step: ROIC = NOPAT ÷ invested capital, where NOPAT = EBIT × (1 − tax rate). Worked example, questions and limitations included.
Use it to turn Currency (symbol only, never converted), Operating income (EBIT), Tax rate (your rate — none assumed), Invested capital (debt + equity − excess cash) into a checked result you can compare, copy, or rerun with different assumptions.
The page shows the formula, a numeric worked example, and the assumptions that affect this corporate finance calculation.
Inputs and what they mean
- Currency (symbol only, never converted)
- — choice value.
- Operating income (EBIT)
- — number value.
- Tax rate (your rate — none assumed)
- — number value.
- Invested capital (debt + equity − excess cash)
- — number value.
How to use it
- Enter each value in the unit shown next to the box (use the unit converter first if your numbers are in other units).
- Check the breakdown to see every intermediate step.
- Read the limitations before relying on the result.
Formula
Return on invested capital as described in OpenStax Principles of Finance.
Definitions of invested capital vary; state which one you used.
Use average invested capital for the period when it changes a lot.
ROIC = NOPAT ÷ invested capital, where NOPAT = EBIT × (1 − tax rate).
Inputs used: Currency (symbol only, never converted), Operating income (EBIT), Tax rate (your rate — none assumed), Invested capital (debt + equity − excess cash).
Worked example
A mid-size company
- NOPAT = 500,000 × 0.75 = $375,000.
- 375,000 ÷ 2,500,000 = 15%.
Reading the result
The headline figure is the main answer. Any breakdown underneath shows the parts that make it up, so you can check the working and see what changes when you adjust an input.
Limitations and assumptions
- Invested-capital definitions differ between analysts.
- Uses a single period.
- Results are educational estimates built only from the figures you enter. They are not personalised investment, tax, legal or accounting advice. Rates, growth and discount assumptions are always yours to choose.
- The result depends on the values you enter for this roic calculator; it does not supply missing rates, rules, prices, dates, or assumptions for you.
Common questions
What is a good value?
It depends on the industry, business model and point in the cycle. We do not supply benchmarks; compare against your own history or published peers.
Why compare ROIC with WACC?
If ROIC exceeds the cost of capital, the business is earning more than its capital costs. We do not estimate WACC for you.
Is this investment advice?
No. It is a calculation of the figures you enter, not a recommendation to invest or not.
How do I use the ROIC Calculator?
Enter the required values for Currency (symbol only, never converted), Operating income (EBIT), Tax rate (your rate — none assumed), Invested capital (debt + equity − excess cash). The calculator applies the formula on this page and shows the main result with any supporting breakdown so you can check the arithmetic.
What formula does the ROIC Calculator use?
ROIC = NOPAT ÷ invested capital, where NOPAT = EBIT × (1 − tax rate). The visible formula section above lists the calculation path and the edge cases the page handles, so the result can be checked without relying on the form alone.
Can the ROIC Calculator be used for exact decisions?
Use it as a calculation aid, not as a substitute for checking the underlying rule, contract, policy, or professional advice that applies to your situation. When a result depends on local rules, personal details, prices, or dates, enter those values yourself and confirm them before acting.
Related tools
Calculate ROA step by step: Return on assets = net income ÷ average total assets × 100.
Calculate ROE step by step: Return on equity = net income ÷ average shareholders' equity × 100.
Calculate NPV step by step: NPV = −initial investment + Σ CFₜ ÷ (1 + r)ᵗ for t = 1…n.
Calculate IRR step by step: IRR is the rate r at which −initial + Σ CFₜ ÷ (1 + r)ᵗ = 0.
Calculate Payback Period step by step: Payback = years before full recovery + unrecovered amount ÷ cash flow in the recovery year.
Calculate Discounted Payback step by step: Discount each CFₜ by (1 + r)ᵗ, then find when the cumulative discounted flow covers the investment.