ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. MJL Bangladesh's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was 7.82%.
As of today (2024-06-04), MJL Bangladesh's WACC % is 7.29%. MJL Bangladesh's ROIC % is 11.91% (calculated using TTM income statement data).
MJL Bangladesh 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.
MJL Bangladesh ROIC % Historical Data
The historical data trend for MJL Bangladesh'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 Oil & Gas Refining & Marketing subindustry, MJL Bangladesh'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.
MJL Bangladesh's ROIC % Distribution in the Oil & Gas Industry
For the Oil & Gas industry and Energy sector, MJL Bangladesh's ROIC % distribution charts can be found below:
* The bar in red indicates where MJL Bangladesh's ROIC % falls into.
MJL Bangladesh ROIC % Calculation
MJL Bangladesh's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jun. 2023 is calculated as:
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.
MJL Bangladesh (DHA:MJLBD) 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, MJL Bangladesh's WACC % is 7.29%. MJL Bangladesh's ROIC % is 11.91% (calculated using TTM income statement data).
MJL Bangladesh 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.
MJL Bangladesh 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.
MJL Bangladesh ROIC % Related Terms
Thank you for viewing the detailed overview of MJL Bangladesh's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
MJL Bangladesh PLC is engaged in the process, manufacture trade of lubricants, blending, marketing of lubricants and grease products. the company has bifurcated the revenues in Oil Tanker, the Manufacturing Unit, which generates the majority of revenue, and Trading Unit. Its automotive lubricants include Car Engine Oils, Motorcycle Engine Oils, Bus & Truck Engine Oils, Gear Oils, and Others. It also produces Industrial & Specialty Lubricants which includes Greases, Compressor Oils, Aviation Products, and others. It serves various industries, some of which include agriculture, automotive, construction, natural gas, and commercial industries. The majority of the revenue is generated from the domestic market but the company also exports some of its products in the International market.
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