ROIC: what it is and how to read it

What it is

Return on invested capital: how much the company earns for each euro invested in the business. Consistently above 15% suggests a competitive advantage.

How to read it

See whether ROIC stays high over several years and whether it is above the company's cost of capital. Compare with competitors: banks and insurers aren't measured well by this ratio.

Educational information; not a recommendation to buy or sell.