01 / UNDERSTAND THE CONCEPT
A multiple tells you how much, not how fast.
Multiple on invested capital, or MOIC, compares realized proceeds plus remaining value with invested capital. A 3.5× multiple means total value is three and a half times the capital invested.
MOIC does not consider how long the investment has been held or when cash flows occurred. It also combines realized cash with unrealized estimates, which can change. Use a time-based measure alongside it when timing matters.
02 / THE MATHEMATICS
The formula, made clear.
MOIC = (realized proceeds + remaining investment value) ÷ invested capital
- Realized proceeds
- Cash already returned by the investment.
- Remaining value
- Current estimate of the unsold position’s value.
03 / A WORKED EXAMPLE
Put the numbers in context.
$1.5M of proceeds plus $2M of remaining value on a $1M investment gives a 3.5× gross MOIC.
| Input | Example value |
|---|---|
| Invested capital | $1,000,000.00 |
| Realized proceeds | $1,500,000.00 |
| Remaining value | $2,000,000.00 |
| Gross multiple on invested capital | 3.5× |
MODEL BOUNDARIES
What this calculation assumes
Gross values before fees, carried interest and tax. Remaining value is an estimate, not cash received.
FROM UNDERSTANDING TO ACTION
What to consider next.
Separate realized distributions from paper value. Consider holding time when comparing investments with the same multiple.
How we approach financial models →