Return On Invested Capital 5 Year Average

Returns the five-year average Return on Invested Capital (ROIC) for a company. ROIC measures how efficiently a company uses its invested capital to generate profits.

Supported Symbol Formats

Type Format Example
US Stocks SYMBOL AAPL, MSFT

Formula

ROIC = Net Operating Profit After Tax (NOPAT) / Invested Capital

Interpretation

ROIC Level Interpretation
> 15% Excellent capital efficiency
10-15% Good capital efficiency
5-10% Average
< 5% Poor capital efficiency

Notes

  • Returns value as a decimal (0.15 = 15%)
  • Higher ROIC indicates better capital allocation
  • Compare to cost of capital for value creation assessment

Examples

=ReturnOnCapitalFiveYearAverage("AAPL")
Apple 5-year avg ROIC
=ReturnOnCapitalFiveYearAverage("MSFT")
Microsoft 5-year avg ROIC
=ReturnOnCapitalFiveYearAverage("WMT")
Walmart 5-year avg ROIC
=ReturnOnCapitalFiveYearAverage(A1)
Symbol from cell reference
=ReturnOnCapitalFiveYearAverage("AAPL")*100
Convert to percentage

When to Use

  • Assess long-term capital efficiency
  • Compare companies' capital allocation
  • Quality investing analysis
  • Identify consistent value creators

When NOT to Use

Scenario Use Instead
Current ROIC ReturnOnCapital()
Quarterly ROIC ReturnOnInvestedCapitalQuarter()
Return on equity ReturnOnEquityFiveYearAverage()
Return on assets ReturnOnAssetsFiveYearAverage()

Common Issues & FAQ

Q: Why is the value less than 1? A: ROIC is returned as a decimal. Multiply by 100 to get percentage (e.g., 0.15 = 15%).

Q: What is a good ROIC? A: Generally, ROIC above 15% is considered excellent. Compare to the company's cost of capital - value is created when ROIC exceeds WACC.

Q: Why compare to cost of capital? A: If ROIC > WACC (weighted average cost of capital), the company creates value. If ROIC < WACC, it destroys value.

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MarketXLS Excel Add-in Tutorial - How to Use Return On Invested Capital 5 Year Average and Other Financial Formulas
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