The ROIC of Retail Properties of America Inc is 2.58%
Return on invested capital (ROIC) is a financial ratio that measures how efficient a company is at allocating the capital under its control to profitable investments.
= NOPAT / Invested capital = EBIT * (1 - tax rate) / (2-year average liabilities + 2-year average shareholder equity)
Return on invested capital (ROIC) ratio gives investors a sense of how well a company is using money under its control to generate profitable returns.
ROIC can be used as a benchmark to calculate the valuation of companies across industries. A higher ROIC means the company is doing a better job of investing the money from shareholders and bondholders to run the business. A company is creating value if its ROIC exceeds 2%. If its ROIC is under 2%, the company is likely destroying value and has no excess capital to invest in future growth.
You can calculate ROIC with the following formula:
NOPAT = Net operating profit after tax
Invested Capital = Average total liabilities + Average shareholders' equity
The averages of liabilities and shareholders' equity are calculated as geometrical averages of the last two annual values from the company's balance sheet.
Retail Properties of America, Inc. is a REIT that owns and operates high quality, strategically located open-air shopping centers, including properties with a mixed-use component. As of December 31, 2020, the Company owned 102 retail operating properties in the United States representing 20.0 million square feet.