BHP Group (BHP Group) ROIC % : 21.35% (As of Dec. 2021)

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What is BHP Group 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 %. BHP Group's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2021 was 21.35%.

As of today (2024-04-26), BHP Group's WACC % is 0.00%. BHP Group's ROIC % is 0.00% (calculated using TTM income statement data). BHP Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

BHP Group ROIC % Historical Data

The historical data trend for BHP Group'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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BHP Group ROIC % Chart

BHP Group Annual Data

Trend

Jun12

Jun13

Jun14

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

ROIC %

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7.13

8.87

11.78

10.41

15.57

BHP Group Semi-Annual Data
	Jun12	Dec12	Jun13	Dec13	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21
ROIC %	Get a 7-Day Free Trial															12.62	8.34	12.07	19.09	21.35

Competitive Comparison of BHP Group's ROIC %

For the Other Industrial Metals & Mining subindustry, BHP Group'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.

BHP Group's ROIC % Distribution in the Metals & Mining Industry

For the Metals & Mining industry and Basic Materials sector, BHP Group's ROIC % distribution charts can be found below:

* The bar in red indicates where BHP Group's ROIC % falls into.

BHP Group ROIC % Calculation

BHP Group's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jun. 2021 is calculated as:

	ROIC % (A: Jun. 2021 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2020 )	+	Invested Capital (A: Jun. 2021 ))	/ count )
=	25050 * ( 1 - 43.7% )	/	( (92406	+	88810)	/ 2 )
=	14103.15	/	90608
=	15.57 %

where

	Invested Capital		(A: Jun. 2020 )
=	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	))
=	105733	-	6680	-	( 13414	-	max(0, 14824	-	21471	+	13414	))
=	92406

	Invested Capital		(A: Jun. 2021 )
=	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	))
=	108927	-	9827	-	( 15317	-	max(0, 16403	-	26693	+	15317	))
=	88810

BHP Group's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2021 is calculated as:

	ROIC % (Q: Dec. 2021 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2021 )	+	Invested Capital (Q: Dec. 2021 ))	/ count )
=	28492 * ( 1 - 34.22% )	/	( (88810	+	86797)	/ 2 )
=	18742.0376	/	87803.5
=	21.35 %

where

	Invested Capital		(Q: Jun. 2021 )
=	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	))
=	108927	-	9827	-	( 15317	-	max(0, 16403	-	26693	+	15317	))
=	88810

	Invested Capital		(Q: Dec. 2021 )
=	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	))
=	105725	-	6406	-	( 12522	-	max(0, 20619	-	39673	+	12522	))
=	86797

Note: The Operating Income data used here is two times the semi-annual (Dec. 2021) data.

BHP Group (NYSE:BBL) 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, BHP Group's WACC % is 0.00%. BHP Group'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.

BHP Group ROIC % Related Terms

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BHP Group (BHP Group) Business Description

Industry

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Address

160 Victoria Street, Nova South, London, GBR, SW1E 5LB

Website

https://www.bhp.com

BHP is a leading global diversified miner supplying iron ore, copper, oil, gas, and metallurgical. The merger of BHP Limited (now BHP Ltd.) and Billiton PLC (now BHP PLC) created the present-day BHP. Shareholders in each company have equivalent economic and voting rights in BHP as a whole and in 2022 voted to reunify the dual listed structure. Major assets include Pilbara iron ore, Queensland coking coal, Escondida copper and conventional petroleum assets, principally in Australia and the Gulf of Mexico. Onshore U.S. oil and gas assets were sold in 2018 and the remaining Petroleum assets are likely to be spun off and merged with Woodside.