# How to Calculate Return on Invested Capital Before Taxes in Xero

### Making the most of your Xero data

## What is Return on Invested Capital Before Taxes?

Return on Invested Capital (ROIC) is a profitability ratio that measures the amount of profit a company generates with the money invested in its business. It's calculated by dividing the company's operating income by its invested capital.

For example, if your company has $10 million in revenue and $5 million in operating income, your ROIC would be 50%.

A high ROIC is the goal for any company, and is a sign that your company is doing well.

For example, if you have $10 million in revenue and $10 million in invested capital, your ROIC would be 100%, which is the highest possible ROIC.

## How do you calculate Return on Invested Capital Before Taxes in Xero?

It can be difficult to calculate Return on Invested Capital Before Taxes directly inside of Xero; that's where Causal comes in.

Causal is a modelling tool which lets you build models on top of your Xero data. You simply connect Causal to your Xero account, and then you can build formulae in Causal to calculate your Return on Invested Capital Before Taxes.

## What is Causal?

Causal lets you build models effortlessly and share them with interactive, visual dashboards that everyone will understand.

In Causal, you build your models out of variables, which you can then link together in simple plain-English formulae to calculate metrics like Return on Invested Capital Before Taxes. This makes your models easy to understand and quick to build, so you can spend minutes, not days, on your models.

When you're done, you can share the link to your model with stakeholders. They'll be able to view your model's outputs in a visual dashboard, rather than a jumble of tabs and complex formulae. The dashboards are interactive, letting viewers tweak your assumptions to see how they affect the model's outputs.

Causal lets you add visuals in a single click, letting you plot out graphs and distributions for metrics like Return on Invested Capital Before Taxes.