ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Ocean Bio-Chem's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2022 was -2.08%.
As of today (2024-05-07), Ocean Bio-Chem's WACC % is 2.46%. Ocean Bio-Chem's ROIC % is 10.94% (calculated using TTM income statement data).
Ocean Bio-Chem generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.
Ocean Bio-Chem ROIC % Historical Data
The historical data trend for Ocean Bio-Chem'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.
For the Conglomerates subindustry, Ocean Bio-Chem'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.
Ocean Bio-Chem's ROIC % Distribution in the Conglomerates Industry
For the Conglomerates industry and Industrials sector, Ocean Bio-Chem's ROIC % distribution charts can be found below:
* The bar in red indicates where Ocean Bio-Chem's ROIC % falls into.
Ocean Bio-Chem ROIC % Calculation
Ocean Bio-Chem's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2021 is calculated as:
Note:
The Operating Income data used here is four times the quarterly (Jun. 2022) 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.
Ocean Bio-Chem (NAS:OBCI) 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, Ocean Bio-Chem's WACC % is 2.46%. Ocean Bio-Chem's ROIC % is 10.94% (calculated using TTM income statement data).
Ocean Bio-Chem generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.
Ocean Bio-Chem 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 %, 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.
Ocean Bio-Chem ROIC % Related Terms
Thank you for viewing the detailed overview of Ocean Bio-Chem's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Ocean Bio-Chem (Ocean Bio-Chem) Business Description
Ocean Bio-Chem Inc is engaged in the manufacturing, marketing, and distribution of a broad line of appearance, performance and maintenance products for the marine, automotive, power sports, recreational vehicle, home care and outdoor power equipment markets, under the Star brite and Star Tron brand names. It sells these products within the USA and Canada. The company produces private label formulations of many of its products for various customers and provide custom blending and packaging services for these and other products. It also manufactures, markets and distributes chlorine dioxide-based deodorizing disinfectant, and sanitizing products under the Star brite and Performacide brand names, utilizing a patented delivery system for use with products containing chlorine dioxide.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
OBCI has been successfully added to your 