IRR/MOIC Analysis
An initial investment of $100,000 with an IRR of 15% and a MOIC of 2.5.
- MOIC:
- 2.5
- Initial Investment:
- 100000
- IRR:
- 15%
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Valuation⚗ Includes simulator
IRR / MOIC
IRR/MOIC is a combination of metrics to assess the profitability and performance of an investment.
Also known as : irr moic
Deep dive
IRR/MOIC is used to get an overview of the profitability (IRR) and overall performance (MOIC) of an investment. This combination allows understanding both the percentage return and the multiple of invested capital. However, it can be complex to interpret if the two metrics diverge significantly.
Key formula
Use IRR for percentage return and MOIC for capital multiple.
Real-world examples
Pitfalls to avoid
- Not understanding the difference between IRR and MOIC.
- Ignoring divergences between the two metrics.
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