IGM Financial (IGM Financial) ROC % : 6.24% (As of Dec. 2023)

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What is IGM Financial ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. IGM Financial's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 6.24%.

As of today (2024-04-28), IGM Financial's WACC % is 6.23%. IGM Financial's ROC % is 4.66% (calculated using TTM income statement data). IGM Financial earns returns that do not match up to its cost of capital. It will destroy value as it grows.

IGM Financial ROC % Historical Data

The historical data trend for IGM Financial'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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IGM Financial ROC % Chart

IGM Financial Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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5.47

5.34

6.48

4.98

4.92

IGM Financial Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROC %	Get a 7-Day Free Trial															4.76	4.82	2.70	4.51	6.24

IGM Financial ROC % Calculation

IGM Financial'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 )
=	743.769 * ( 1 - 18.79% )	/	( (12056.953	+	12499.14)	/ 2 )
=	604.0148049	/	12278.0465
=	4.92 %

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	))
=	13792.799	-	502.497	-	( 1233.349	-	max(0, 2085.574	-	8412.728	+	1233.349	))
=	12056.953

	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	))
=	13911.212	-	468.414	-	( 943.658	-	max(0, 2181.62	-	7538.964	+	943.658	))
=	12499.14

IGM Financial'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 )
=	1021.528 * ( 1 - 21.7% )	/	( (13139.429	+	12499.14)	/ 2 )
=	799.856424	/	12819.2845
=	6.24 %

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	))
=	14300.989	-	330.202	-	( 831.358	-	max(0, 2243.009	-	7969.638	+	831.358	))
=	13139.429

	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	))
=	13911.212	-	468.414	-	( 943.658	-	max(0, 2181.62	-	7538.964	+	943.658	))
=	12499.14

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

IGM Financial (OTCPK:IGIFF) 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, IGM Financial's WACC % is 6.23%. IGM Financial's ROC % is 4.66% (calculated using TTM income statement data). IGM Financial 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.

IGM Financial ROC % Related Terms

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IGM Financial (IGM Financial) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » IGM Financial Inc (OTCPK:IGIFF) » Definitions » ROC %

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C7G:Germany IGM:Canada

Address

447 Portage Avenue, Winnipeg, MB, CAN, R3B 3H5

Website

https://www.igmfinancial.com

IGM Financial is the largest non-bank-affiliated asset manager in Canada. The firm is part of the Power Financial group of companies, which includes Great-West Life, London Life, and Canada Life. IGM has two main operating divisions—asset management (operated through Mackenzie Investments) and wealth management (via its Investors Group Wealth Management subsidiary)—that provide investment management products and services. IGM had CAD 215.3 billion in assets under management, or AUM, and CAD 35.0 billion in assets under advisement, or AUA, at the end of October 2023. Investment Planning Counsel is now being accounted for as a discontinued operation, having been sold earlier this year, with the deal closed in November 2023.

IGM Financial (IGM Financial) Headlines

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