Glossary
With over 200 terms in both English and French, our M&A Dictionary is designed to help you better understand the key words and concepts related to the sale oe purchase of a business in Canada.
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Return on Invested Capital
« Back to Glossary IndexCategory: Accounting and Finance
Return on Invested Capital (ROIC) in the context of mergers and acquisitions is a financial metric that assesses the efficiency and profitability of capital deployed in an investment. Calculated by dividing a company’s net operating profit after taxes (NOPAT) by its invested capital, ROIC provides insight into how effectively a company generates returns from both equity and debt. For acquirers in M&A, analyzing the target’s ROIC is crucial in evaluating the efficiency of capital utilization and the potential return on the overall investment. A higher ROIC generally indicates better capital efficiency and can influence M&A decision-making.
« Back to Glossary IndexAcronym:
ROIC
French Translation: