How to Calculate Operating Income Return on Investment

by C. Taylor

Operating income return on investment (ROI) calculates the rate of return based on net operating income and total invested assets. This calculation differs from standard ROI in that it focuses on both income and investments, providing a more complete ROI picture. The information necessary to perform this calculation resides on the company's balance sheet and includes net --- or adjusted --- operating income and total assets or total invested capital.

Locate the net operating income on the balance sheet. This includes all income, including interest, depreciation and rent. This figure may also be listed as "adjusted operating income."

Locate the total operating assets of the company. This may also be listed as "invested capital."

Divide the net operating income by the total operating assets to determine the ROI. As an example, Walmart reported an "adjusted operating income" of $31.5 billion for 2009 with $169 billion in operating assets. Dividing 31.5 by 169 yields and ROI of 0.186, or 18.6 percent. The figures here are rounded. Walmart's actual reported ROI for 2009 was 18.7 percent.