Return on invested capital (ROIC) is a financial metric that measures the profitability of a company’s investments. It is calculated by dividing the net income generated by an investment by the amount of capital invested. ROIC can be used to evaluate the performance of individual projects, as well as the overall performance of a company.
ROIC is an important metric because it provides insights into how efficiently a company is using its capital. A high ROIC indicates that a company is generating a good return on its investments, while a low ROIC indicates that a company is not using its capital effectively. ROIC can also be used to compare the performance of different companies in the same industry.