Calculate return on invested capital (ROIC) online.
WACC % Historical Data
The historical data trend for ‘s WACC % can be seen below:
View and export this data going back to 1990. Start your Free Trial
- For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
- For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company’s associated stock exchange currency.
Return on invested capital (ROIC) formula
ROIC = (Net operating profit – Adjusted taxes) / Invested Capital x 100
The ROIC formula is calculated by assessing the value in the denominator, total capital, which is the sum of a company’s debt and equity.
What is Return on Invested Capital?
Both investors and company management use this formula to measure how well the company is managed and how efficiently its capital is utilized.
Comparing a company’s return on invested capital with its weighted average cost of capital (WACC) reveals whether invested capital is being used effectively. This measure is also known simply as “return on capital.”
ROIC vs WACC
Since WACC (Weighted Average Cost of Capital) is the minimum expected return a capital provided would usually demand, the difference between the Return On Invested Capital and WACC is the “excess return” or the “economic profit” realized by an investing agent. The ROIC percentage should be greater than the WACC percentage in order for the firm to be generating capital and adding value for its investors.
Comparing a company’s return on invested capital with its weighted average cost of capital (WACC) reveals whether invested capital is being used effectively.
Example of How to Use Return on Invested Capital
As a historical example, let’s consider Target Corporation’s (TGT) fourth-quarter 2018 earnings release. The company calculated its trailing 12-month month ROIC for that year, showing the components that went into the calculation:
|Target Corp. FY 2018 ROIC Calculation|
|(All values in millions of U.S. dollars)||TTM 2/3/18||TTM 1/28/17|
|Earnings from continuing operations before interest expense and income taxes||4,312||4,969|
|+ Operating lease interest *||80||71|
|– Income taxes||864||1,648|
|Net operating profit after taxes||3,528||3,392|
|Current portion of long-term debt and other borrowings||270||1,718|
|+ Noncurrent portion of long-term debt||11,317||11,031|
|+ Shareholders’ equity||11,709||10,953|
|+ Capitalized operating lease obligations *||1,339||1,187|
|– Cash and cash equivalents||2,643||2,512|
|– Net assets of discontinued operations||2||62|
|Average invested capital||22,152||22,608|
|After-tax return on invested capital||15.9%||15.0%|
Target Corp. FY 2018 ROIC Calculation
This website is provided “as is” without any representations or warranties, express or implied. The site provides ROIC (return on invested capital) value without any warranty for it’s accuracy. All financial decisions should be made with consultation with your financial advisor. This website is not responsible for, and expressly disclaims all liability for, damages of any kind arising out of use, reference to, or reliance on any information contained within the site. By using this website you agree to those terms, if not then do not use this website.