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Joel Greenblatt defined Return on Capital differently in his book The Little Book That Still Beats the Market (Little Books. Big Profits). He defines ROC (Joel Greenblatt) % as EBIT divided by the total of Property, Plant and Equipment and net working capital. Varian Medical Systems's annualized ROC (Joel Greenblatt) % for the quarter that ended in Dec. 2020 was 61.57%.
The historical rank and industry rank for Varian Medical Systems's ROC (Joel Greenblatt) % or its related term are showing as below:
During the past 13 years, Varian Medical Systems's highest ROC (Joel Greenblatt) % was 100.80%. The lowest was 44.37%. And the median was 71.32%.
Varian Medical Systems's 5-Year average Growth Rate of ROC (Joel Greenblatt) % was -0.10% per year.
The historical data trend for Varian Medical Systems's ROC (Joel Greenblatt) % 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.
Varian Medical Systems Annual Data | |||||||||||||||||||||
Trend | Sep11 | Sep12 | Sep13 | Sep14 | Sep15 | Sep16 | Sep17 | Sep18 | Sep19 | Sep20 | |||||||||||
ROC (Joel Greenblatt) % | Get a 7-Day Free Trial | 61.61 | 49.27 | 79.17 | 65.09 | 48.49 |
Varian Medical Systems Quarterly Data | ||||||||||||||||||||
Mar16 | Jun16 | Sep16 | Dec16 | Mar17 | Jun17 | Sep17 | Dec17 | Mar18 | Jun18 | Sep18 | Dec18 | Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | |
ROC (Joel Greenblatt) % | Get a 7-Day Free Trial | 59.95 | 26.34 | 39.19 | 50.18 | 61.57 |
For the Medical Instruments & Supplies subindustry, Varian Medical Systems's ROC (Joel Greenblatt) %, along with its competitors' market caps and ROC (Joel Greenblatt) % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
For the Medical Devices & Instruments industry and Healthcare sector, Varian Medical Systems's ROC (Joel Greenblatt) % distribution charts can be found below:
* The bar in red indicates where Varian Medical Systems's ROC (Joel Greenblatt) % falls into.
Joel Greenblatt defined Return on Capital differently in his book The Little Book That Still Beats the Market (Little Books. Big Profits) . He defines Return on Capital as follows:
ROC (Joel Greenblatt) % | = | EBIT | / | Average of (Net fixed Assets | + | Net Working Capital) |
EBIT stands for Earnings Before Interest and Taxes.
Fixed Assets are also known as non-current assets. They include the Property, Plant and Equipment that the firm needs in its operation.
GuruFocus calculates net working capital as: (Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Deferred Revenue + Other Current Liabilities). We're trying to account for OPERATING assets and liabilities (part of daily business) when calculating working capital. Cash and marketable securities are considered NON-OPERATING assets and are not included in calculation. We will also back out all interest bearing debt, short term debt and the portion of long term debt that is due in the current period from the current liabilities. This debt will be considered when computing cost of capital and it would be inappropriate to count it twice.
Working Capital | (Q: Sep. 2020 ) | ||||||||||
= | (Accounts Receivable | + | Total Inventories | + | Other Current Assets) | - | (Accounts Payable & Accrued Expense | + | Defer. Rev. | + | Other Current Liabilities) |
= | (1066.1 | + | 516.3 | + | 254.8) | - | (404.9 | + | 875.6 | + | 188.4) |
= | 368.3 |
Working Capital | (Q: Dec. 2020 ) | ||||||||||
= | (Accounts Receivable | + | Total Inventories | + | Other Current Assets) | - | (Accounts Payable & Accrued Expense | + | Defer. Rev. | + | Other Current Liabilities) |
= | (1029.3 | + | 571.7 | + | 267) | - | (689.2 | + | 845.7 | + | 0) |
= | 333.1 |
When net working capital is negative, 0 is used.
So ROC (Joel Greenblatt) % of Varian Medical Systems for the quarter that ended in Dec. 2020 can be restated as:
ROC (Joel Greenblatt) % | (Q: Dec. 2020 ) | ||||||
= | EBIT | / | Average of (Net fixed Assets | + | Net Working Capital) | ||
= | EBIT | / | Average of (Property, Plant and Equipment | + | Net Working Capital) | ||
Q: Sep. 2020 | Q: Dec. 2020 | ||||||
= | EBIT | / | ( ( (Property, Plant and Equipment + Net Working Capital) | + | (Property, Plant and Equipment + Net Working Capital) ) | / | count ) |
= | 502.8 | / | ( ( (465.9 + max(368.3, 0)) | + | (466 + max(333.1, 0)) ) | / | 2 ) |
= | 502.8 | / | ( ( 834.2 | + | 799.1 ) | / | 2 ) |
= | 502.8 | / | 816.65 | ||||
= | 61.57 % |
Note: The EBIT data used here is four times the quarterly (Dec. 2020) EBIT data.
* 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.
Varian Medical Systems (NYSE:VAR) ROC (Joel Greenblatt) % Explanation
The way Joel Greenblatt defines Return on Capital is a more accurate measure of how efficiently the company generates returns onthe capital actually invested in the business. EBIT is used instead of net income because the tax and interest payment may be affected by factors other than the core business operation. Intangible assets are not included in the calculation because they don't need to be replaced.
Joel Greenblatt uses his definition of Return on Capital and Earnings Yield (Joel Greenblatt) % to rank companies.
Thank you for viewing the detailed overview of Varian Medical Systems's ROC (Joel Greenblatt) % provided by GuruFocus.com. Please click on the following links to see related term pages.
Jesse Michael Bruff | officer: SVP Finance, CFO | 3100 HANSEN WAY, PALO ALTO CA 94304 |
Magnus Momsen | officer: SVP, CAO, Corporate Controller | VARIAN MEDICAL SYSTEMS INC. 3100 HANSEN WAY MAIL STOP E327 PALO ALTO CA 94304 |
Dow R Wilson | director, officer: President and CEO | VARIAN MEDICAL SYSTEMS INC, 3100 HANSEN WAY MAIL STOP E327, PALO ALTO CA 94304 |
Kolleen T Kennedy | officer: Pres. Proton Solutions, CGO | VARIAN MEDICAL SYSTEMS INC, 3100 HANSEN WAY MAIL STOP E327, PALO ALTO CA 94304 |
Christopher A. Toth | officer: SVP and Pres. Oncology Systems | 1252 COOLIDGE AVE., SAN JOSE CA 95125 |
Michael Damon Hutchinson | officer: SVP,Chief Legal Officer, Secy | 2825 AIRVIEW BLVD, KALAMAZOO MI 49002 |
Jean Luc Butel | director | ONE BAXTER PARKWAY, DEERFIELD IL 60015 |
John W Kuo | officer: SVP, Gen Counsel and Secretary | VARIAN MEDICAL SYSTEMS INC, 3100 HANSEN WAY MAIL STOP E327, PALO ALTO CA 94304 |
Judy Bruner | director | C/O SANDISK CORPORATION, 601 MCCARTHY BLVD., MILPITAS CA 95035 |
Beau Michelle Le | director | 800 N. MICHIGAN AVENUE #3703 CHICAGO IL 60611 |
Anat Ashkenazi | director | LILLY CORPORATE CENTER, INDIANAPOLIS IN 46285 |
Jeffrey R. Balser | director | 3657 RICHLAND AVE., NASHVILLE TN 37205 |
Regina E Dugan | director | VARIAN MEDICAL SYSTEMS INC, 3100 HANSEN WAY MAIL STOP E327, PALO ALTO CA 94304 |
David J Illingworth | director | 3100 HANSEN WAY PALO ALTO CA 94304 |
R Andrew Eckert | director | THREE RAVINIA DRIVE, ATLANTA GA 30346 |
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