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ROIC vs WACC Value-Creation Calculator

Compare return on invested capital with the cost of capital.
ROIC minus WACC
3.00%
ROIC
12.00%
Annual economic profit
$300.0M

ROIC and WACC are definition-sensitive estimates. The trend and the economics of incremental investment can matter more than one point value.

Growth creates economic value only when returns on incremental capital exceed the capital’s opportunity cost. Enter NOPAT, invested capital, and WACC to calculate ROIC, the ROIC-minus-WACC spread, and estimated annual economic profit.

Formula reviewed 2026-08-021 primary sourceMethodology and disclosures →

How this roic vs wacc value-creation calculator works

The model divides after-tax operating profit by invested capital, subtracts the entered capital cost, and multiplies invested capital by the spread to estimate economic profit.

Formula

ROIC = NOPAT ÷ invested capital; economic profit = NOPAT − invested capital × WACC

Accounting choices and intangible investment can materially distort both numerator and denominator. A positive spread does not by itself establish valuation upside.

Primary specifications

Before you use the result

Assumptions

  • • NOPAT and invested capital use consistent operating definitions.
  • • WACC is an editable opportunity-cost estimate rather than an observable fact.
  • • Acquisitions, goodwill, leases, excess cash, and capitalized intangibles are treated consistently.

Quick start

  1. 1. Reconcile NOPAT and invested capital from filings.
  2. 2. Test a range of capital costs rather than one decimal point.
  3. 3. Compare historical, current, and incremental returns with reinvestment opportunities.

Frequently asked questions

What is ROIC?

Return on invested capital compares after-tax operating profit with the capital committed to operating the business.

What is WACC?

Weighted average cost of capital estimates the opportunity cost required by debt and equity providers, weighted by financing mix.

Does ROIC above WACC guarantee a good stock return?

No. Valuation, durability, reinvestment runway, expectations, and future changes determine the investment outcome.

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A positive spread creates value only if it can persist.

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