Elbit Systems (Elbit Systems) ROC %

: 4.06% (As of Dec. 2023)

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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Elbit Systems's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 4.06%.

As of today (2024-04-18), Elbit Systems's WACC % is 9.57%. Elbit Systems's ROC % is 4.51% (calculated using TTM income statement data). Elbit Systems earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Elbit Systems ROC % Historical Data

The historical data trend for Elbit Systems's ROC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Elbit Systems Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

5.19

4.47

3.97

4.55

4.37

Elbit Systems Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROC %																6.96	4.60	4.98	5.08	4.06

Elbit Systems ROC % Calculation

Elbit Systems's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	362.512 * ( 1 - 10.12% )	/	( (7299.628	+	7616.662)	/ 2 )
=	325.8257856	/	7458.145
=	4.37 %

where

	Invested Capital		(A: Dec. 2022 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	9215.651	-	1703.875	-	( 212.148	-	max(0, 4277.289	-	5031.777	+	212.148	))
=	7299.628

	Invested Capital		(A: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	9739.582	-	1914.973	-	( 207.947	-	max(0, 4823.846	-	5508.08	+	207.947	))
=	7616.662

Elbit Systems's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	243.928 * ( 1 - -22.59% )	/	( (7102.398	+	7616.662)	/ 2 )
=	299.0313352	/	7359.53
=	4.06 %

where

	Invested Capital		(Q: Sep. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	9615.251	-	2365.983	-	( 146.87	-	max(0, 4845.523	-	5416.001	+	146.87	))
=	7102.398

	Invested Capital		(Q: Dec. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	9739.582	-	1914.973	-	( 207.947	-	max(0, 4823.846	-	5508.08	+	207.947	))
=	7616.662

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

Elbit Systems (NAS:ESLT) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Elbit Systems's WACC % is 9.57%. Elbit Systems's ROC % is 4.51% (calculated using TTM income statement data). Elbit Systems earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Be Aware

Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Elbit Systems ROC % Related Terms

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Elbit Systems (Elbit Systems) Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

ESLT:Israel EB2:Germany

Address

Advanced Technology Center, P.O. Box 539, Haifa, ISR, 3100401

Website

https://www.elbitsystems.com

Elbit Systems Ltd is a technology company involved in producing a portfolio of systems and products for aircraft, land, and naval applications. The company's products are used for defense, homeland security, and commercial flight capabilities. Its systems and solutions may be installed on new platforms, or it may perform a comprehensive modernization program to transform a platform. Elbit Systems gives instructions to its customers on the proper maintenance of its products and will provide support team specialists when the customer cannot fix a problem. The company markets its systems and products as a prime contractor or as a subcontractor to government, defense, and homeland security contractors world wide.