Eastern Security & Protection Services (Eastern Security & Protection Services) ROIC % : 20.57% (As of Jun. 2011)

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What is Eastern Security & Protection Services ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Eastern Security & Protection Services's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2011 was 20.57%.

As of today (2024-04-27), Eastern Security & Protection Services's WACC % is 0.00%. Eastern Security & Protection Services's ROIC % is 0.00% (calculated using TTM income statement data). Eastern Security & Protection Services earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Eastern Security & Protection Services ROIC % Historical Data

The historical data trend for Eastern Security & Protection Services's ROIC % 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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Eastern Security & Protection Services ROIC % Chart

Eastern Security & Protection Services Annual Data

Trend

Jun07

Jun08

Jun09

Jun10

ROIC %

-100.00

-1,550.00

-474.98

-160.00

Eastern Security & Protection Services Quarterly Data
	Jun07	Sep07	Dec07	Mar08	Jun08	Sep08	Dec08	Mar09	Jun09	Sep09	Dec09	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11
ROIC %	Get a 7-Day Free Trial												-	-622.21	-	44.72	20.57

Competitive Comparison of Eastern Security & Protection Services's ROIC %

For the Security & Protection Services subindustry, Eastern Security & Protection Services's ROIC %, along with its competitors' market caps and ROIC % 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.

Eastern Security & Protection Services's ROIC % Distribution in the Business Services Industry

For the Business Services industry and Industrials sector, Eastern Security & Protection Services's ROIC % distribution charts can be found below:

* The bar in red indicates where Eastern Security & Protection Services's ROIC % falls into.

Eastern Security & Protection Services ROIC % Calculation

Eastern Security & Protection Services's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jun. 2010 is calculated as:

	ROIC % (A: Jun. 2010 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2009 )	+	Invested Capital (A: Jun. 2010 ))	/ count )
=	-0.011 * ( 1 - -9.09% )	/	( (0.006	+	0.009)	/ 2 )
=	-0.0119999	/	0.0075
=	-160.00 %

where

	Invested Capital		(A: Jun. 2009 )
=	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	))
=	0.012	-	0.008	-	( 0.006	-	max(0, 0.008	-	0.006	+	0.006	))
=	0.006

	Invested Capital		(A: Jun. 2010 )
=	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	))
=	0.003	-	0.004	-	( 0	-	max(0, 0.01	-	0	+	0	))
=	0.009

Eastern Security & Protection Services's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2011 is calculated as:

	ROIC % (Q: Jun. 2011 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2011 )	+	Invested Capital (Q: Jun. 2011 ))	/ count )
=	4.124 * ( 1 - 25.45% )	/	( (14.653	+	15.24)	/ 2 )
=	3.074442	/	14.9465
=	20.57 %

where

	Invested Capital		(Q: Mar. 2011 )
=	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	))
=	16.075	-	0.509	-	( 0.913	-	max(0, 5.216	-	8.67	+	0.913	))
=	14.653

	Invested Capital		(Q: Jun. 2011 )
=	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	))
=	15.467	-	0.22	-	( 0.007	-	max(0, 3.712	-	6.118	+	0.007	))
=	15.24

Note: The Operating Income data used here is four times the quarterly (Jun. 2011) data.

Eastern Security & Protection Services (OTCPK:EAST) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 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 ROIC % 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, Eastern Security & Protection Services's WACC % is 0.00%. Eastern Security & Protection Services's ROIC % is 0.00% (calculated using TTM income statement data).

Be Aware

Like ROE % and ROA %, ROIC % 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.

Eastern Security & Protection Services ROIC % Related Terms

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