Abbreviated as ROC, refers to a measure of how effectively a firm uses the money (borrowed or owned) invested in its operations. Return on Invested Capital is equal to the following: net operating income after taxes / [total assets minus cash and investments (except in strategic alliances) minus non-interest-bearing liabilities]. If the Return on Invested Capital of a firm exceeds its WACC, then the firm created value. If the Return on Invested Capital is less than the WACC, then the firm destroyed value.