What Is ROIC (Return on Invested Capital)?
ROIC shows how much a company earns from its core business on the money invested in it, from both lenders and shareholders. Compared with WACC, the cost of raising that money, it tells you whether the company earns more than its cost of capital — in other words, whether it creates value.
ROIC formula
ROIC = NOPAT ÷ Invested capital × 100
Invested capital = Debt + Equity + Non-controlling interests
NOPAT is operating profit after tax, the profit from the core business. Invested capital is the sum of borrowing (interest-bearing debt) and shareholders' money (equity and non-controlling interests), averaged over the opening and closing balances. Because it uses core profit, ROIC is less affected by investment or asset-sale gains and losses.
Calculate ROIC
Enter amounts in the same unit
Result
After-tax operating profit relative to invested capital
8.4%
Invested capital = interest-bearing debt + equity + non-controlling interests (cash is not deducted), averaged over the opening and closing balances.
Current ROIC distribution in Japan
Price date: October 19, 2026
ROIC median
5.6%
Median of Japanese stocks with ROIC
ROIC interquartile range
2.8% – 9.9%
Range containing the middle 50% of stocks
Positive ROIC
3,232 stocks
90.1% · 356 negative
Stocks with ROIC
3,588 / 3,958
370 without ROIC (see below)
ROIC distribution
This covers Japanese stocks with a calculable ROIC. ETFs and REITs are excluded. Each range includes its lower bound and excludes its upper bound (0–5% means at least 0% and below 5%).
Stocks without ROIC
Blanks are never filled with zero; counts are shown by reason.
- Financials (banks, securities, insurance)
- 141stocks
- Companies with a financing business
- 15stocks
- Other stocks without ROIC
- 214stocks
Their liability structure differs from operating companies, so ROIC is not calculated.
Financing-arm borrowings would inflate invested capital and understate ROIC, so it is left blank.
Missing operating profit or equity data, or invested capital of zero or below.
Of the companies reviewed as having a financing business, 4 are calculated on non-financial figures, 15 are left blank and 29 stay on consolidated figures because financing borrowings are small.
Median ROIC by sector
Sectors with at least 10 stocks with ROIC. Levels depend on how capital-intensive a business is, so compare within a sector first.
Examples from large-cap stocks
This is not a recommendation ranking. It connects ROIC, WACC, their spread and ROE using actual data. WACC is an estimate based on stated assumptions.
- Price
- ¥3,102+0.26%
- ROIC
- 5.8%
- WACC
- 8.56%
- ROIC − WACC
- -2.8 pts
- ROE
- 12.2%
- Price
- ¥18,775+1.93%
- ROIC
- 24.4%
- WACC
- 7.08%
- ROIC − WACC
- +17.3 pts
- ROE
- 36.5%
- Price
- ¥5,773+0.05%
- ROIC
- 11.2%
- WACC
- 8.64%
- ROIC − WACC
- +2.5 pts
- ROE
- 12.9%
- Price
- ¥34,450-0.23%
- ROIC
- 49.3%
- WACC
- 9.26%
- ROIC − WACC
- +40.1 pts
- ROE
- 56.9%
- Price
- ¥10,350-2.63%
- ROIC
- 22.5%
- WACC
- 8.81%
- ROIC − WACC
- +13.7 pts
- ROE
- 31.2%
- Price
- ¥3,960+0.03%
- ROIC
- 8.9%
- WACC
- 7.62%
- ROIC − WACC
- +1.2 pts
- ROE
- -2.7%
- Price
- ¥73,850-2.29%
- ROIC
- 16.4%
- WACC
- 8.04%
- ROIC − WACC
- +8.4 pts
- ROE
- 21.2%
- Price
- ¥13,600+1.68%
- ROIC
- 27.8%
- WACC
- 7.16%
- ROIC − WACC
- +20.6 pts
- ROE
- 87.1%
Read ROIC next to WACC and check whether the spread is positive. Compare Japanese companies by ROIC − WACC →
Reading ROIC: the spread over WACC
Value spread = ROIC − WACC
ROIC > WACC
The company earns more than its cost of capital, generating profit beyond what capital providers require.
ROIC ≈ WACC
Returns roughly equal the cost of capital. It is profitable, but value is not growing much.
ROIC < WACC
Returns fall short of the cost of capital. Review the business mix and how capital is deployed.
WACC is the cost of funding: interest on debt and the return shareholders expect, averaged by the capital mix. The ROIC − WACC gap is also called the EVA spread, and the Tokyo Stock Exchange cites comparing ROIC with WACC as one way to assess capital profitability. A positive spread alone does not make an investment decision.
WACC guide covers the WACC and cost-of-equity formulas and Stock Club's assumptions (risk-free rate, market risk premium and adjusted beta).
ROIC versus ROE
ROIC (whole-business view)
After-tax operating profit ÷ (debt + equity + non-controlling interests). Core earnings on capital from lenders and shareholders; compare it with WACC.
ROE (shareholder view)
Profit attributable to owners ÷ equity. Bottom-line profit on shareholders' money; compare it with the cost of equity. It tends to rise with more borrowing.
ROE guide covers the ROE formula, DuPont analysis and the Japanese market distribution.
How Stock Club calculates ROIC
Rules designed for comparison on the same base as WACC
- ROIC = operating profit × (1 − 30% tax rate) ÷ invested capital, i.e. after-tax operating profit (NOPAT) over invested capital.
- Invested capital = interest-bearing debt + equity + non-controlling interests, averaged over the opening and closing balances, with no deduction for cash.
- Non-controlling interests (outside shareholders of subsidiaries) are included because operating profit includes 100% of subsidiaries' earnings. ROE's denominator covers only the parent's shareholders, so the two differ.
- Financials (banks, securities, insurance) are not calculated. Companies with invested capital of zero or below are blank.
- Operating companies with financing businesses are left blank because those borrowings would understate ROIC. Companies that disclose separate non-financial and financial balance sheets in their annual securities report (such as Toyota) are calculated on non-financial figures.
- The same values appear in lists, the screener and the cost-of-capital comparison. Blanks are never filled with zero.
There is no single rule for the ROIC denominator, and treatment of cash varies by company and source. Figures are reference information for consistent comparison, not investment advice.
Caveats when using ROIC
Cash-rich companies read lower
Stock Club does not deduct cash from invested capital, so idle funds count toward capital efficiency and companies holding lots of cash show lower ROIC. Some definitions deduct cash, so figures may differ from company disclosures.
Levels vary widely by sector
Businesses with factories and inventories carry far more invested capital than asset-light ones. Rather than ranking ROIC across sectors, compare with sector medians and the company's own history.
Don't judge on one year
Operating profit moves with the cycle and one-off factors. Check in the earnings history whether the ROIC − WACC spread stays positive.
WACC is an assumption-driven estimate
The WACC compared with ROIC is estimated from assumptions about interest rates, beta and the market risk premium. Use it to compare companies under the same assumptions rather than as an absolute. The current assumptions are listed in the WACC guide.
ROIC FAQ
What is a good ROIC?
There is no universal cutoff. Read ROIC against WACC, the company's cost of funding. When ROIC exceeds WACC, the company earns more than its cost of capital and can be read as creating value. Levels differ widely by sector, so compare with peers.
How does ROIC differ from ROE?
ROE is net income relative to equity attributable to the parent's shareholders, the shareholder's view. ROIC is after-tax operating profit relative to invested capital from both lenders and shareholders, the view of the whole business. Borrowing more tends to lift ROE, but ROIC is less affected because debt is in the denominator.
Why is cash not deducted from invested capital?
There is no single rule for the ROIC denominator. Stock Club keeps cash in so ROIC is measured on the same debt-plus-equity base as WACC. Companies holding a lot of cash therefore show lower ROIC. Some methods deduct cash, so figures may differ from company disclosures.
Why is ROIC not shown for banks or brokers?
Banks, securities firms and insurers have a liability structure unlike operating companies, so ROIC is not calculated. Operating companies with financing arms are generally left blank too, because those borrowings would understate ROIC.
Put ROIC into practice
The cost-of-capital comparison lists ROIC, WACC and their spread for Japanese companies, filterable by sector. Combine it with ROE, DOE and payout ratio to see how earning power relates to shareholder returns.
Help
Video guides
Short videos on what each page shows and how to read the metrics.
What ROIC and WACC mean, and how to read “Returns above the cost of capital”.
1:48 · with sound
Companies shown are examples. Past figures and company policies do not guarantee future results. Not investment advice.