What it measures
Return on Invested Capital is net operating profit after tax, divided by total invested capital, debt plus equity combined. Where ROE only looks at shareholders' own money, ROIC looks at every naira or dollar the business is actually working with, borrowed or owned.
That makes it a fairer efficiency comparison between two companies with very different capital structures, one funded mostly by shareholders, one funded mostly by debt, where ROE alone could tell a misleading story.
A worked example
A company generates 300,000,000 in after-tax operating profit while carrying 1.5 billion in total invested capital, debt and equity combined. ROIC: 300,000,000 / 1,500,000,000 = 20%.
How Kobo & Cents uses it
ROIC rounds out the profitability category alongside net profit margin and ROE. Where the three disagree with each other, a company strong on margin but weak on ROIC, for instance, is exactly the kind of nuance the explainability panel is built to actually surface, not flatten into one number.