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What is Return on Invested Capital (ROIC)?

By Adam Levy – Updated Oct 9, 2024 at 1:16PM

Key Points

  • Calculate ROIC by dividing NOPAT by invested capital to assess company profitability.
  • Comparing ROIC to WACC reveals if a company is creating or destroying shareholder value.
  • High ROIC indicates potential for premium stock valuations; use it alongside other metrics.
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