MOIC (Multiple on Invested Capital)
The ratio of total proceeds from an investment to the total capital invested, without adjusting for time.
Also known as: Multiple on Invested Capital, Cash-on-cash return, MoM (Money on Money)
One-line definition
MOIC tells you how many times you got your money back, ignoring when you got it.
Formula
MOIC = Total proceeds received ÷ Total equity invested
Relationship with IRR
A 3× MOIC over 3 years is a much better IRR than a 3× MOIC over 7 years. PE funds report both: MOIC shows magnitude of return, IRR shows speed.
Related terms
IRR (Internal Rate of Return)
The annualised return on an investment, expressed as the discount rate that makes the net present value of all cash flows equal to zero.
LBO (Leveraged Buyout)
An acquisition financed primarily with debt, where the target's cash flows service the leverage and equity returns are amplified.
Equity Value
The value of the shareholders' stake in a business, derived by subtracting net debt from enterprise value.