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ROIC and ROE are common metrics used to measure efficiency of a company. Return on Equity, ROE, is calculated by taking Net Income and dividing it by Shareholder Equity. It's a quick calculation to check on how a company's assets and liabilities lead to profitability. Return on Invested Capital is a fancy ROE. Net Profit After Taxes, Operating Income * (1 - Tax Rate), divided by Capital Invested, Shareholder Equity plus Total Debt, plus Non-Operating Cash. So it has a larger denominator and thus will be a lower value than ROE. There's some more nuance to the differences between ROE and ROIC, but you can't go wrong including one or both in your investment decisions. ... That you make after consulting a financial advisor and not based on anything you learned here on this website. REIT's don't typically get assessed using ROE/ROIC, but we added it here as a fun metric for any curious REIT investors. We just substituted FFO for Net Income over Shareholder Equity for your convenience.
| Category | Year | Reported ROIC | Calculated ROIC | Reported ROE | Calculated ROE | Reported REIT ROE | Calculated REIT ROE |
|---|---|---|---|---|---|---|---|
| Average | 5.843% | 5.843% | 8.874% | 8.874% | 16.653% | 16.653% | |
| 2023 | 5.448% | 5.448% | 8.197% | 8.197% | 13.081% | 13.081% | |
| 2022 | 11.832% | 11.832% | 17.490% | 17.490% | 21.956% | 21.956% | |
| 2021 | 16.339% | 16.339% | 24.213% | 24.213% | 28.643% | 28.643% | |
| 2020 | 5.573% | 5.573% | 9.128% | 9.128% | 14.534% | 14.534% | |
| 2019 | -0.527% | -0.527% | -0.929% | -0.929% | 5.246% | 5.246% | |
| 2018 | 4.998% | 4.998% | 8.269% | 8.269% | 13.465% | 13.465% | |
| 2017 | 3.908% | 3.908% | 6.540% | 6.540% | 12.215% | 12.215% | |
| 2016 | 6.504% | 6.504% | 11.187% | 11.187% | 16.547% | 16.547% | |
| 2015 | 5.184% | 5.184% | 10.392% | 10.392% | 19.450% | 19.450% | |
| 2014 | 17.911% | 17.658% | 34.427% | 33.505% | 42.251% | 41.119% |