how do you calculate roic 
the roic formula is net operating profit after tax nopat divided by invested capital companies with a steady or improving return on capital are unlikely to put significant amounts of new capital to work investors and analysts might also use the return on new invested capital ronic calculation to determine the value of deploying new or additional capital to a new or existing project the bottom lineroic is a popular financial metric it tells us how well a company uses its capital and whether it is creating value with its investments at a minimum a company s roic should be higher than its cost of capital if it consistently isn t then the business model is not sustainable roic is particularly useful when examining companies that invest a large amount of capital moreover like many metrics it is more informative when used to compare similar companies operating in the same sector often the companies in a sector with the highest roics will trade at a premium 