# ROIC Calculator – Return on Invested Capital

URL: https://speedycalculator.com/calculators/finance/roic/
Last updated: 2026-10-25

> The ROIC calculator measures how much after-tax operating profit a company earns on the capital invested by shareholders and lenders, and compares it with WACC to show whether it creates value.

## Inputs

- EBIT
- Tax rate (%)
- Equity
- Debt
- Cash (excess)
- WACC (for comparison) (%)

## Results

- NOPAT
- Invested capital
- Return on invested capital (ROIC)
- Value spread (ROIC − WACC)
- Economic value added

## Formula

```
NOPAT = EBIT × (1 − tax rate)
Invested capital = equity + debt − cash
ROIC = NOPAT ÷ invested capital; value spread = ROIC − WACC
```

## Explanation

ROIC is one of the best measures of business quality. Companies that earn ROIC well above their cost of capital for years – often thanks to a competitive moat – tend to create the most shareholder value.

### How to use the ROIC Calculator – Return on Invested Capital

- **EBIT**
- **Tax rate**
- **Equity**
- **Debt**
- **Cash (excess)**
- **WACC (for comparison)**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter EBIT, tax rate, equity, debt, cash and WACC.

### Tips

- Take figures from the same financial statements and the same fiscal year.
- Compare ratios with companies in the same industry, not across industries.
- Use several valuation measures together; no single ratio tells the whole story.
- Market prices change every second – refresh the share price before you rely on a result.

### Common mistakes to avoid

- Mixing per-share figures with company totals.
- Using trailing earnings for one company and forward earnings for another.
- Forgetting dilution from options and convertible securities.

### Inputs explained

FieldWhat to enterEBITAmount in your currencyTax rateIn %EquityAmount in your currencyDebtAmount in your currencyCash (excess)Amount in your currencyWACC (for comparison)In %

### What each result means

- **NOPAT** = [EBIT]×(1 - [Tax rate]÷100)
- **Invested capital** = [Equity] + [Debt] - [Cash (excess)]
- **Return on invested capital (ROIC)** = [NOPAT]÷[Invested capital]×100
- **Value spread (ROIC − WACC)** = [Return on invested capital (ROIC)] - [WACC (for comparison)]
- **Economic value added** = [Invested capital]×[Value spread (ROIC − WACC)]÷100

### Example values

How the main result changes when **EBIT** changes and everything else stays at the example values above:

EBITReturn on invested capital (ROIC) (%)25,000,0007.0537,500,00010.5850,000,00014.1162,500,00017.6375,000,00021.16100,000,00028.21

## Worked example

Inputs — EBIT: $50,000,000; Tax rate: 21 %; Equity: $180,000,000; Debt: $120,000,000; Cash (excess): $20,000,000; WACC (for comparison): 9 %.

Results — NOPAT = $39,500,000.00; Invested capital = $280,000,000.00; **Return on invested capital (ROIC) = 14.11 %**; Value spread (ROIC − WACC) = 5.11 %; Economic value added = $14,300,000.00.

## FAQ

**What is a good ROIC?**
Above the company's WACC; 15%+ is excellent.

**How is ROIC different from ROE?**
ROIC includes debt-funded capital, so it isn't boosted by leverage.

**Should cash be subtracted?**
Usually excess cash is excluded because it isn't used in operations.

**What formula does the ROIC Calculator – Return on Invested Capital use?**
NOPAT = EBIT × (1 − tax rate).


## Sources

- [Corporate Finance Institute – financial ratios](https://corporatefinanceinstitute.com/)