Since profit is measured over an entire year,whereas capital is measured at only one point in time,it is recommended that return on invested capital (ROIC )use the average of starting and ending invested capital.

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Since profit is measured over a year, it is appropriate to use the average of starting and ending invested capital to calculate the return on invested capital (ROIC) over that year, as this provides a more accurate representation of the capital used throughout the year. Using only the capital value at a single point in time could result in an inaccurate representation of the return on the investment over the whole year.

Since Profit Is Measured Over an Entire Year,whereas Capital Is