What is ROIC (Return on invested capital) and why is it important

Warren Buffett says the number one job of a CEO is capital allocation. Return on invested capital (ROIC)  is A financial metric that one can use to assess how the management is doing at deploying capital and bringing returns back to the shareholder. Today we go through what return on Invested capital is, how to calculate it and why it is so important for the investor to understand the ins and outs of this particular metric. This is not investing advice and is for entertainment purposes only.