Return on invested capital

Return on invested capital (ROIC) is like a measure of how well a company is using its money to make more money. Imagine you get some money from your piggy bank and you want to use that money to buy some toys to sell to your friends at your lemonade stand.

Now, let's say you spend your money wisely and you make a good profit. That means you've done a good job using your money to make even more money. This is kind of like ROIC - it's a way to measure how well a company uses its money to make profits.

ROIC is calculated by looking at how much profit a company makes compared to the amount of money it invests in things like buying equipment, building warehouses or buying real estate. Higher ROIC means that the company is able to make more profit from the same amount of investment.

In summary, ROIC is a way of measuring how well a company uses its money to make more money, just like how you use your piggy bank money to make a profit at your lemonade stand.