ROIC & Payback Period Calculator Free Template

Description
This template provides users a ready-to-use calculator of return of invested capital (ROIC) and Payback Period throughout the forecast financial statements.


Return on invested capital (ROIC) is a calculation used to assess a company’s efficiency at allocating the capital under its control to profitable investments. It shows how well a company uses its capital to generate profits. Comparing a company’s return on invested capital with its weighted average cost of capital (WACC) reveals whether invested capital is being used effectively.


The payback period is the number of years necessary to recover funds invested in a project. Similarly, the discounted payback period is the number of years after which the cumulative discounted cash inflows cover the initial investment.


The payback period and the discounted payback period are measures that allow us to assess how many years the original investment will pay back.


More commonly, they are used to figure out how the project cash inflow will recover its outlays before an arbitrarily assumed date. These two ratios are useful for assessing the liquidity of a project.


However, the payback period and the discounted payback period doesn’t account for cash flows after the recovery of the original investment, they can’t be used as profitability measures.


The model allows users to understand how the ROIC and Payback are generated and illustrates the results in visualizations.


The model is ready-to-use, fully customizable, and dynamic. All inputs in color BLUE could be fine-tuned according to users’ real circumstances.


The template is user-friendly for professional analysts or users with little experience in financial modeling since its a simple design pattern and easy-to-follow logic.


The model does not place any complicated formulas or VBA code to guarantee the user’s satisfaction. The structure and content have been created following the Best Financial Modeling Principles and considering the high level of flexibility and user-friendly priority.


Please feel no hesitation in contacting us if you experience problems using the models provided.


In addition, if you need a customized model for your specific business, please let us know, and we would be happy to help you with this.