Return on Invested Capital

Return on Invested Capital (ROIC) = Net after tax Income/(Long term Liabilities + Shareholder Equity).

ROIC is a measure of the return on all invested capital including long term liabilities.

However because income is subject to any number of internal accounting adjustments, and because this ratio does not incorporate an assessment of risk, it can be regarded as not of great value when comparing ratios across different companies.

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