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Concept of the Day

Return on Invested Capital (ROIC)

Profitability Metrics

ROIC measures how efficiently a company uses its capital to generate profits. A company with ROIC consistently above its cost of capital (WACC) is creating value for shareholders.

ROIC = NOPAT / Invested Capital

Look for companies with ROIC > 15% sustained over 5+ years.

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Investing DictionaryQuick definitions of key investing terms

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