ROIC is a measure of how efficiently and effectively managers use the capital at their disposal to produce profitability.

Question

Quizplus · Accepted Answer

ROIC (Return on Invested Capital) is a metric that evaluates the effectiveness of a company's management in using its invested capital to produce profits. It calculates the return earned on the capital invested in the business, including both debt and equity. Therefore, ROIC measures the efficiency of capital allocation by managers and reflects how well the company generates profits relative to the capital invested in the business.

ROIC Is a Measure of How Efficiently and Effectively Managers