ROIC may not capture the risk profile of a company. Companies in high-risk sectors, like biotech or startups, may exhibit low ROIC due to the heavy investments required for research and development.

Return on invested capital (ROIC) is used to gauge how well a company allocates capital to profitable activities. Total debt and capital lease obligations are added to the amount of equity issued ...

On the other hand, cut-throat competition that chips away at a company’s profits and margins tends to lead to low ROIC. Apple’s ROIC hovered around 35% in 2010, within three years following ...