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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 %. Drive Shack's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2023 was -0.64%.
As of today (2024-04-25), Drive Shack's WACC % is 6.71%. Drive Shack's ROIC % is -2.41% (calculated using TTM income statement data). Drive Shack earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The historical data trend for Drive Shack'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.
Drive Shack Annual Data | |||||||||||||||||||||
Trend | Dec13 | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | |||||||||||
ROIC % | Get a 7-Day Free Trial | -5.76 | -13.78 | -8.04 | -3.64 | -5.83 |
Drive Shack Quarterly Data | ||||||||||||||||||||
Dec18 | Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | |
ROIC % | Get a 7-Day Free Trial | -3.61 | -10.77 | -4.46 | 5.90 | -0.64 |
For the Leisure subindustry, Drive Shack'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 Travel & Leisure industry and Consumer Cyclical sector, Drive Shack's ROIC % distribution charts can be found below:
* The bar in red indicates where Drive Shack's ROIC % falls into.
Drive Shack's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2022 is calculated as:
ROIC % (A: Dec. 2022 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (A: Dec. 2021 ) | + | Invested Capital (A: Dec. 2022 )) | / count ) |
= | -26.384 * ( 1 - -4.07% ) | / | ( (453.82 | + | 487.356) | / 2 ) |
= | -27.4578288 | / | 470.588 | |||
= | -5.83 % |
where
Invested Capital | (A: 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 | )) |
= | 482.79 | - | 38.854 | - | ( 61.772 | - | max(0, 110.733 | - | 100.849 | + | 61.772 | )) |
= | 453.82 |
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 | )) |
= | 457.981 | - | 46.21 | - | ( 13.976 | - | max(0, 127.111 | - | 51.526 | + | 13.976 | )) |
= | 487.356 |
Drive Shack's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2023 is calculated as:
ROIC % (Q: Sep. 2023 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Jun. 2023 ) | + | Invested Capital (Q: Sep. 2023 )) | / count ) |
= | -3.244 * ( 1 - 2.49% ) | / | ( (489.8 | + | 491.221) | / 2 ) |
= | -3.1632244 | / | 490.5105 | |||
= | -0.64 % |
where
Invested Capital | (Q: Jun. 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 | )) |
= | 464.753 | - | 41.19 | - | ( 16.906 | - | max(0, 124.094 | - | 57.857 | + | 16.906 | )) |
= | 489.8 |
Invested Capital | (Q: Sep. 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 | )) |
= | 466.118 | - | 40.391 | - | ( 13.81 | - | max(0, 114.353 | - | 48.859 | + | 13.81 | )) |
= | 491.221 |
Note: The Operating Income data used here is four times the quarterly (Sep. 2023) 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.
Drive Shack (OTCPK:DSHK) 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, Drive Shack's WACC % is 6.71%. Drive Shack's ROIC % is -2.41% (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 Drive Shack's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Wesley R Edens | director | 1345 AVENUE OF THE AMERICAS, 45TH FLOOR, NEW YORK NY 10105 |
Hana Khouri | officer: President | 218 WEST 18TH STREET, 3RD FLOOR, NEW YORK NY 10011 |
Stuart A Mcfarland | director | C/O FORTRESS INVESTMENT GROUP, 1345 AVE OF THE AMERICAS 46TH FL, NEW YORK NY 10105 |
Goodfield Lawrence A. Jr. | officer: CFO, CAO & Treasurer | 1345 AVENUE OF THE AMERICAS, NEW YORK NY 10105 |
Michael Lee Nichols | officer: Chief Financial Officer | C/O DRIVE SHACK INC., 218 W. 18TH STREET, 3RD FLOOR, NEW YORK NY 10011 |
Acacia Research Corp | director | 767 3RD AVENUE, 6TH FLOOR, NEW YORK NY 10017 |
Virgis Colbert | director | 5725 DELPHI DRIVE, TROY MI 48098 |
Benjamin M Crane | director | 218 WEST 18TH STREET 3RD FLOOR, NEW YORK NY 10011 |
Clifford Press | director | 152 WEST 57TH STREET, NEW YORK NY 10019 |
David Hammarley | officer: Chief Financial Officer | 111 WEST 19TH STREET, 8TH FLOOR, NEW YORK NY 10011 |
Kenneth A May | director, officer: CEO & President | 13155 NOEL ROAD, SUITE 1600, THREE GALLERIA TOWER, DALLAS TX 75240 |
William J Clifford | director | 845 BERKSHIRE BLVD. SUITE 200, WYOMISSING PA 19610 |
Alan L. Tyson | director | 1345 AVENUE OF THE AMERICAS, NEW YORK NY 10105 |
Sara A. Yakin | officer: Chief Operating Officer | 1345 AVENUE OF THE AMERICAS, NEW YORK NY 10105 |
Sarah Watterson | officer: CEO & President | 1345 AVENUE OF THE AMERICAS, NEW YORK NY 10105 |
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