Page Updated on September 20, 2026
Overview
Latest ROIC measures how effectively a company generates operating profit from the capital invested in its business.
ROIC stands for Return on Invested Capital. The metric compares the company’s after-tax operating profit with the capital used to operate the business.
A higher positive ROIC indicates that the company is generating more operating profit relative to the capital invested in its operations.
Formula
StockZuse calculates ROIC as:
NOPAT stands for Net Operating Profit After Tax. It represents operating profit after estimating the taxes attributable to that operating profit.
StockZuse calculates NOPAT as:
The Effective Tax Rate is calculated as:
StockZuse calculates Invested Capital as:
Invested Capital is calculated for both the latest annual period and the preceding annual period. StockZuse then calculates Average Invested Capital as:
For example, if a company has NOPAT of $15.65 billion and Average Invested Capital of $79.12 billion, StockZuse calculates an ROIC of approximately 19.77%.
How StockZuse Uses the Metric
StockZuse uses Latest ROIC as a Business Quality metric within the ZuseScore.
The metric measures how effectively a company generates after-tax operating profit from the capital invested in its business. This provides a different perspective from margin metrics, which measure profitability relative to revenue.
StockZuse uses average invested capital based on the current and preceding annual periods rather than using only the invested capital reported at the end of the latest period.
ZuseScore Point System
Latest ROIC contributes a maximum of 14 points to the ZuseScore.
| Latest ROIC | Points |
|---|---|
| 25% or more | 14 / 14 |
| 20% to less than 25% | 12 / 14 |
| 15% to less than 20% | 10 / 14 |
| 10% to less than 15% | 7 / 14 |
| 5% to less than 10% | 3 / 14 |
| 0% to less than 5% | 1 / 14 |
| Below 0% | 0 / 14 |
If the financial data required to calculate ROIC are unavailable, the metric is shown as Unavailable and is not scored.
For example, an ROIC of 19.77% falls within the 15% to less than 20% range and receives 10 of 14 points.
Interpretation
ROIC provides a measure of how much operating profit a company generates relative to the capital invested in its operations.
A positive ROIC indicates that the company’s operations generated positive after-tax operating profit relative to invested capital. Higher ROIC values represent greater operating profit relative to the amount of capital employed.
ROIC should be considered together with the other ZuseScore metrics rather than used by itself to evaluate a company.
Limitations
ROIC can vary significantly among industries because businesses differ in the amount of capital required to operate.
The calculation also depends on accounting values reported in a company’s financial statements. Changes in debt, cash, equity, operating income, or taxes can affect the calculated ROIC.
StockZuse requires sufficient annual financial data to calculate NOPAT and both current and prior invested capital. If the required data are unavailable, Latest ROIC is not scored.
Related Methodology
For information about how this metric combines with the other ZuseScore metrics, see ZuseScore Methodology.