What is ROIC (Return on Invested Capital)?
ROIC measures how well a company generates returns on ALL capital invested in the business — both equity and debt — making it the purest measure of business quality.
Formula
ROIC = NOPAT ÷ Invested Capital
How to Interpret
A company creates value only when ROIC exceeds its cost of capital (WACC). ROIC > 15% sustained over 5+ years signals an exceptional business.
Typical Ranges
Above 15% is strong. Above 20% sustained = likely economic moat.
Find Stocks Using This Metric
Use the Equiscale Stock Screener to filter Indian stocks by ROIC.
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