Enter the MOIC and investment duration into the calculator to determine the IRR. This calculator can also evaluate any of the variables given the others are known.
Moic To Irr Formula
The following formula is used to calculate the IRR (Internal Rate of Return) from MOIC (Multiple on Invested Capital).
IRR = ((MOIC)^{(1/n)}) - 1Variables:
- IRR is the Internal Rate of Return (%)
- MOIC is the Multiple on Invested Capital (no units)
- n is the investment duration in years
To calculate the IRR, raise the MOIC to the power of the reciprocal of the investment duration in years. Subtract 1 from the result to get the IRR.
What is a Moic To Irr?
A Moic To Irr is a financial metric used in private equity and venture capital to compare the total gain or loss generated by an investment relative to the amount of money invested. MOIC stands for Multiple on Invested Capital, which measures the return on each dollar invested. IRR, on the other hand, stands for Internal Rate of Return, which is the annualized effective compounded return rate that can be earned on the invested capital. Both are used to evaluate the efficiency or profitability of potential investments.
