Return on Invested Capital (ROIC) Calculator

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Calculator, Excel, Financial Analysis, Financial Planning, Financial Reporting, Free Financial Model Templates, Return on Invested Capital (ROIC)

Why do you want to Calculate ROIC?

ROIC is a financial ratio that is calculated from an economic point of view using the following formula:

ROIC = NOPLAT / Invested Capital

The focus of ROIC is to understand how well the capital of the company is invested. ROIC, In contrast to other financial ratios such as ROE and ROA, focuses on understanding how much capital is required to run this business and how much profits are generated. Therefore, it excludes the effects of non-operating assets and financial leverage. ROIC can be used to calculate economic profit when deducting the cost of capital. Economic profit is a measure of how much value a company creates and allows a great analysis of the operating financial performance of a business over time or in comparison to its peer companies. Please refer to this article which explains in more detail what ROIC is.

The ROIC Calculator

The ROIC Calculator offers a simple editable Excel spreadsheet template where you will enter the relevant figures from a company’s Income Statement and Balance Sheet to calculate NOPLAT and Invested Capital for a period of 10 years.

Once the financial figures and the company’s income tax rate is entered, the Excel spreadsheet template will calculate the Invested Capital and NOPLAT for each year and the resulting ROICs.

The great thing about this template is you can input 10 years of financial data to study the company’s trend in operating profitability. If ROIC is constantly increasing, the company will do something right. If the ROIC decreases over time, this would raise the question of why.

This free ROIC calculator offers a valuable tool for all those who seek quick help with getting a basic ROIC calculation done.

The spreadsheet has been kept simple, keeping it to one page only. The template comes with a pre-filled example and an empty spreadsheet tab so that you can easily enter the applicable figures of your business.

File format: .xlsx

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