What is the focus of the Multiple on Invested Capital (MOIC) metric?

The Multiple on Invested Capital (MOIC) metric is primarily concerned with measuring the total cash distributions generated from an investment relative to the capital invested. This metric provides insights into the gross returns that an investor has received from their investment over time, without adjusting for the time value of money.

In this context, MOIC is valuable because it allows investors to see how many times their initial investment has been returned to them, which is crucial for assessing the overall success of an investment strategy. It simplifies the evaluation process by focusing solely on cash flows, making it easy to communicate success or failure to stakeholders.

While the other options mention profitability, return on equity, or estimated market value, they encompass broader aspects of financial performance or valuation, which are not the specific focus of MOIC. MOIC exclusively tracks the relationship between invested capital and cash distributions, making it a straightforward and direct measurement of investment performance.