IRR and MOIC: How to Estimate Returns Without a Calculator

IRR and MOIC are two core measures of investment performance, especially in private equity and leveraged buyout interviews. Understanding their differences—and knowing a few mental-math shortcuts—lets you estimate returns quickly without a calculator.

Author: Alex Johnson Updated 4 min read

What MOIC measures

MOIC stands for multiple on invested capital. It compares the cash an investor receives with the cash the investor originally contributed.

The formula is: MOIC = total proceeds divided by invested capital. If a sponsor invests $100 million and later receives $250 million, the investment produces a 2.5x MOIC. A 1.0x MOIC means the investor merely recovers the original investment, while anything below 1.0x represents a loss.

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