Fiat Industrial SpA (MIL:FI) ROC % : 4.91% (As of Jun. 2013)

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What is Fiat Industrial SpA ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Fiat Industrial SpA's annualized return on capital (ROC %) for the quarter that ended in Jun. 2013 was 4.91%.

As of today (2024-06-09), Fiat Industrial SpA's WACC % is 0.00%. Fiat Industrial SpA's ROC % is 0.00% (calculated using TTM income statement data). Fiat Industrial SpA earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Fiat Industrial SpA ROC % Historical Data

The historical data trend for Fiat Industrial SpA's ROC % 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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Fiat Industrial SpA ROC % Chart

Fiat Industrial SpA Annual Data

Trend

Dec04

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

ROC %

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6.22

1.95

0.67

2.49

4.11

Fiat Industrial SpA Quarterly Data
	Dec09	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13
ROC %	Get a 7-Day Free Trial										4.24	4.69	3.18	3.04	4.91

Fiat Industrial SpA ROC % Calculation

Fiat Industrial SpA's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2012 is calculated as:

	ROC % (A: Dec. 2012 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2011 )	+	Invested Capital (A: Dec. 2012 ))	/ count )
=	1862 * ( 1 - 37.98% )	/	( (27106	+	29141)	/ 2 )
=	1154.8124	/	28123.5
=	4.11 %

where

	Invested Capital		(A: Dec. 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	))
=	38643	-	5712	-	( 5825	-	max(0, 8318	-	27936	+	5825	))
=	27106

	Invested Capital		(A: Dec. 2012 )
=	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	))
=	38937	-	5060	-	( 4736	-	max(0, 7896	-	27696	+	4736	))
=	29141

Fiat Industrial SpA's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2013 is calculated as:

	ROC % (Q: Jun. 2013 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2013 )	+	Invested Capital (Q: Jun. 2013 ))	/ count )
=	2452 * ( 1 - 38% )	/	( (30982	+	31001)	/ 2 )
=	1520.24	/	30991.5
=	4.91 %

where

	Invested Capital		(Q: Mar. 2013 )
=	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	))
=	39806	-	5189	-	( 3635	-	max(0, 8020	-	28350	+	3635	))
=	30982

	Invested Capital		(Q: Jun. 2013 )
=	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	))
=	40394	-	5524	-	( 3869	-	max(0, 8499	-	28922	+	3869	))
=	31001

Note: The Operating Income data used here is four times the quarterly (Jun. 2013) data.

Fiat Industrial SpA (MIL:FI) ROC % Explanation

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

Fiat Industrial SpA ROC % Related Terms

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Fiat Industrial SpA (MIL:FI) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Farm & Heavy Construction Machinery » Fiat Industrial SpA (MIL:FI) » Definitions » ROC %

Traded in Other Exchanges

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Address

Website

http://www.fiatindustrial.com

Fiat Industrial SpA operates in the capital goods sector. Each of the Group's businesses is a major international player in its respective industry sector: Iveco, CNH-Case New Holland and FPT Industrial. These three sectors design, produce and sell trucks, commercial vehicles, buses, special vehicles (Iveco), tractors, and agricultural and construction equipment (CNH), in addition to engines and transmissions for those vehicles and engines for marine applications (FPT Industrial). Agricultural equipment is sold under the New Holland Agriculture and Case IH and, in the premium segment in Europe, Steyr brands. Construction equipment is sold under the New Holland Construction and Case Construction brands, as well as the Kobelco brand in North America. Iveco designs, manufactures and sells a wide range of light (2.8-6 tons GVW), medium (6-16 tons GVW) and heavy (above 16 tons GVW) commercial vehicles for on-road and off-road use. In addition to its main product offer, the Company also offers after-sales and financing services, in addition to services related to used-vehicles. FPT Industrial is specialized in the design, production and sale of propulsion and transmission systems for on- and off-road trucks and commercial vehicles, as well as engines for marine application and power generation.