Calculate the return on invested capital (ROIC), a financial ratio that measures the company’s return on the capital invested in it, including both equity and debt.

The return on invested capital is calculated by dividing the net operating profit after taxes (NOPAT) by the average invested capital. Invested capital includes both equity and debt, making this ratio a valuable measure of how efficiently a company generates returns for all of its investors.

The formula is as follows:

\[\text{Return on Invested Capital} = (\text{Net Income} - \text{Paid Dividends}) / \text{Average Invested Capital}\]

Also known as: ROIC.

No programming experience? With the Finance Toolkit MCP server, AI assistants such as Claude and ChatGPT can calculate the Return on Invested Capital (RoIC) for you. Just ask in plain English.

Calculate the Return on Invested Capital (RoIC) in Python

The Return on Invested Capital (RoIC) is available in the Ratios module of the open-source Finance Toolkit. Install it with:

pip install financetoolkit -U

Then call get_return_on_invested_capital as shown below.

from financetoolkit import Toolkit

toolkit = Toolkit(["AAPL", "TSLA"], api_key="FINANCIAL_MODELING_PREP_KEY")

roic_ratios = toolkit.ratios.get_return_on_invested_capital()

Which returns:

  2021 2022 2023 2024 2025
AAPL 0.4143 0.4439 0.444 0.4336 0.5335
TSLA 0.1429 0.2733 0.2403 0.0889 0.0425

Parameters

get_return_on_invested_capital accepts the following parameters:

  • dividend_adjusted (bool, optional): Whether to adjust the net operating profit after taxes with the dividends paid. Defaults to True.
  • rounding (int, optional): The number of decimals to round the results to. Defaults to 4.
  • growth (bool, optional): Whether to calculate the growth of the ratios. Defaults to False.
  • lag (int | str, optional): The lag to use for the growth calculation. Defaults to 1.
  • standardize (bool, optional): Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False.
  • trailing (int): Defines whether to select a trailing period. E.g. when selecting 4 with quarterly data, the TTM is calculated.
Net Profit Margin Interest Burden Ratio Income Before Tax Profit Margin Effective Tax Rate Return on Assets (RoA) Return on Equity (RoE) Income Quality Ratio Return on Tangible Assets (RoTA) Return on Capital Employed (RoCE) Net Income per EBT Free Cash Flow Operating Cash Flow Ratio Tax Burden Ratio

The Ratios module page introduces the module, and the sidebar lists all of its functions.

Share