Series 79: Return On Invested Capital

Taken from our Series 79 Top-off Online Guide

Return on Invested Capital

Return on invested capital (ROIC) measures the return provided by the cumulative capital invested in a company. ROIC is slightly less prone to manipulation than ROE because a company can increase its ROE by taking on debt. Because debt is a type of invested capital, the ratio includes debt as well as equity.

There are various ways to calculate ROIC, but the most common is:

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Solomon Exam Prep Study Materials for the Series 79
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