Tibbs Inc.had the following data for the most recent year: Net income = $300; Net operating profit after taxes (NOPAT) = $400; Total assets = $2,500; Short-term investments = $200; Stockholders' equity = $1,800; Total debt = $700; and Total operating capital = $2,300.What was its return on invested capital (ROIC)?
A) 14.91%
B) 15.70%
C) 16.52%
D) 17.39%
E) 18.26%

Question

Quizplus · Accepted Answer

ROIC is calculated as NOPAT divided by total operating capital. Here, NOPAT is $400 and total operating capital is $2,300. So, ROIC = $400 / $2,300 = 0.1739 or 17.39%.

Tibbs IncHad the Following Data for the Most Recent Year: Net