What is MOIC?
Multiple on Invested Capital (MOIC) is a way to measure how profitable an investment is. It shows the total return you get from an investment compared to the amount of money you originally put in. So, a MOIC of 3x means you got $3 back for every $1 you invested.
MOIC is a key tool in investment analysis, especially in areas like private equity, venture capital, and real estate. It helps investors and fund managers decide whether an investment is worth pursuing.
In this article, we’ll break down the MOIC formula, how to calculate it, and how it compares to other metrics like IRR (Internal Rate of Return) and TVPI (Total Value to Paid-In Capital). We’ll also look at the pros and cons of using MOIC and how it’s used in real-world situations.