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ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Flotek Industries's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was 6.43%.
As of today (2024-05-16), Flotek Industries's WACC % is 8.17%. Flotek Industries's ROIC % is 0.50% (calculated using TTM income statement data). Flotek Industries earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The historical data trend for Flotek Industries'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.
Flotek Industries Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
ROIC % | Get a 7-Day Free Trial | -42.86 | -104.40 | -93.28 | -34.94 | -4.34 |
Flotek Industries Quarterly Data | ||||||||||||||||||||
Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | |
ROIC % | Get a 7-Day Free Trial | -12.95 | -28.02 | 5.62 | 8.29 | 6.43 |
For the Oil & Gas Equipment & Services subindustry, Flotek Industries'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.
For the Oil & Gas industry and Energy sector, Flotek Industries's ROIC % distribution charts can be found below:
* The bar in red indicates where Flotek Industries's ROIC % falls into.
Flotek Industries's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:
ROIC % (A: Dec. 2023 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (A: Dec. 2022 ) | + | Invested Capital (A: Dec. 2023 )) | / count ) |
= | -6.83 * ( 1 - 0.6% ) | / | ( (197.376 | + | 115.276) | / 2 ) |
= | -6.78902 | / | 156.326 | |||
= | -4.34 % |
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 | )) |
= | 164.81 | - | 38.731 | - | ( 12.29 | - | max(0, 151.371 | - | 80.074 | + | 12.29 | )) |
= | 197.376 |
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 | )) |
= | 157.513 | - | 36.386 | - | ( 5.851 | - | max(0, 47.782 | - | 76.447 | + | 5.851 | )) |
= | 115.276 |
Flotek Industries's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Mar. 2024 is calculated as:
ROIC % (Q: Mar. 2024 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Dec. 2023 ) | + | Invested Capital (Q: Mar. 2024 )) | / count ) |
= | 8.444 * ( 1 - 13.41% ) | / | ( (115.276 | + | 111.986) | / 2 ) |
= | 7.3116596 | / | 113.631 | |||
= | 6.43 % |
where
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 | )) |
= | 157.513 | - | 36.386 | - | ( 5.851 | - | max(0, 47.782 | - | 76.447 | + | 5.851 | )) |
= | 115.276 |
Invested Capital | (Q: Mar. 2024 ) | |||||||||||
= | 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 | )) |
= | 155.85 | - | 38.645 | - | ( 5.219 | - | max(0, 44.781 | - | 78.268 | + | 5.219 | )) |
= | 111.986 |
Note: The Operating Income data used here is four times the quarterly (Mar. 2024) 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.
Flotek Industries (NYSE:FTK) 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, Flotek Industries's WACC % is 8.17%. Flotek Industries's ROIC % is 0.50% (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.
Thank you for viewing the detailed overview of Flotek Industries's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
David Nierenberg | director | 19605 NE 8TH STREET, CAMAS WA 98607 |
Ryan Gillis Ezell | officer: SVP, Operations | 10603 N. SAM HOUSTON PARKWAY W., SUITE 300, HOUSTON TX 77064 |
Matthew Wilks | director | 17010 IH-20, CISCO TX 76437 |
James Bond Clement | officer: Chief Financial Officer | 400 E. KALISTE SALOOM ROAD, SUITE 6000, LAFAYETTE LA 70508 |
Harshavardhan V Agadi | director | 5755 NORTH POINT PKWAY #266, ALPHARETTA GA 30022 |
Gibson John W Jr | director, officer: CEO and President | 10603 W. SAM HOUSTON PKWY N., SUITE 300, HOUSTON TX 77064 |
Profrac Holding Corp. | 10 percent owner | 333 SHOPS BOULEVARD, SUITE 301, WILLOW PARK TX 76087 |
Evan R Farber | director | 7903 KENTUCKY AVE., BETHESDA MD 20814 |
Seham Saleh Carson | officer: Interim CFO | 3318 RAVENS ROOST, MISSOURI CITY TX 77459 |
Profrac Holdings Ii, Llc | 10 percent owner | 333 SHOPS BLVD., SUITE 301, WILLOW PARK TX 76087 |
Profrac Holdings, Llc | 10 percent owner | 333 SHOPS BLVD., SUITE 301, WILLOW PARK TX 76087 |
Thrc Management, Llc | 10 percent owner | 17018 INTERSTATE 20, CISCO TX 76437 |
Thrc Holdings, Lp | 10 percent owner | 17018 INTERSTATE 20, CISCO TX 76437 |
Staci Wilks | 10 percent owner | 17018 INTERSTATE 20, CISCO TX 76437 |
Farris Wilks | 10 percent owner | 17018 INTERSTATE 20, CISCO TX 76437 |
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