ROIC -- Return on Invested Capital -- Definition Example What is Return on Invested Capital (ROIC)? Return on invested capital (ROIC) is a profitability ratio It measures the return that an investment generates for those who have provided capital, i e bondholders and stockholders ROIC tells us how good a company is at turning capital into profits
CAGR vs. Average Annual Return: Investment Tips You Need Average Annual Return In the example above, you have 0% gain when using the CAGR calculation – but you have 25% gain when using the average annual return equation That’s because average annual return doesn’t account for compounding: It’s a calculation that takes each year’s growth rate, adds them together, and then divides by the number of years totaled How Are CAGR and Annualized