Net Operating Assets

CFA Level II
#1

In looking at the answer for a ROIC calculation it has suggested to take

Operating income (1-t) / LTD + Equity

The denominator of the ROIC calculation is invested capital (net operating assets) - why has this solution suggested LTD + Equity?

Thanks

#2

Net opertating assets should be debt + equity, also known as Invested Capital (IC)

This isn’t always the case, but assume it is.