Tibbs Inc. has the following information for the current year: Net income = $300; Net operating profit after taxes (NOPAT) = $400; Total assets = $2,900; Short-term investments = $200; Stockholders equity = $1,800; Debt = $700; and Total net operating capital = $2300. What is the Return on invested capital (ROIC) for the current year?
A) 13.0%
B) 13.8%
C) 16.0%
D) 17.4%
E) 22.2%

Question

Quizplus · Accepted Answer

ROIC is calculated as NOPAT divided by Total net operating capital.

ROIC = NOPAT / Total net operating capital

ROIC = $400 / $2,300

ROIC = 0.174 or 17.4%

Therefore, the answer is D) 17.4%.

Tibbs Inc Has the Following Information for the Current Year: Net