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Italgas SpA (FRA:I10) ROIC % : 5.14% (As of Jun. 2024)


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What is Italgas SpA 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 %. Italgas SpA's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2024 was 5.14%.

As of today (2024-10-31), Italgas SpA's WACC % is 3.57%. Italgas SpA's ROIC % is 5.63% (calculated using TTM income statement data). Italgas SpA 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.


Italgas SpA ROIC % Historical Data

The historical data trend for Italgas SpA'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.

* Premium members only.

Italgas SpA ROIC % Chart

Italgas SpA Annual Data
Trend Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
ROIC %
Get a 7-Day Free Trial 5.61 5.43 5.07 5.09 5.88

Italgas SpA Semi-Annual Data
Dec16 Jun17 Dec17 Jun18 Dec18 Jun19 Dec19 Jun20 Dec20 Jun21 Dec21 Jun22 Dec22 Jun23 Dec23 Jun24
ROIC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 5.03 5.37 5.72 6.22 5.14

Competitive Comparison of Italgas SpA's ROIC %

For the Utilities - Regulated Gas subindustry, Italgas SpA'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.


Italgas SpA's ROIC % Distribution in the Utilities - Regulated Industry

For the Utilities - Regulated industry and Utilities sector, Italgas SpA's ROIC % distribution charts can be found below:

* The bar in red indicates where Italgas SpA's ROIC % falls into.



Italgas SpA ROIC % Calculation

Italgas SpA's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:

ROIC % (A: Dec. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2022 ) + Invested Capital (A: Dec. 2023 ))/ count )
=743.135 * ( 1 - 20.24% )/( (9363.198 + 10805.545)/ 2 )
=592.724476/10084.3715
=5.88 %

where

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))
=11030.557 - 1225.295 - ( 457.716 - max(0, 1386.021 - 1828.085+457.716))
=9363.198

Invested Capital(A: Dec. 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))
=11139.648 - 860.056 - ( 254.211 - max(0, 1901.137 - 1375.184+254.211))
=10805.545

Italgas SpA's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2024 is calculated as:

ROIC % (Q: Jun. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Dec. 2023 ) + Invested Capital (Q: Jun. 2024 ))/ count )
=793.59 * ( 1 - 27.53% )/( (10805.545 + 11575.393)/ 2 )
=575.114673/11190.469
=5.14 %

where

Invested Capital(Q: Dec. 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))
=11139.648 - 860.056 - ( 254.211 - max(0, 1901.137 - 1375.184+254.211))
=10805.545

Invested Capital(Q: Jun. 2024 )
=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))
=11541.106 - 1042.854 - ( 298.793 - max(0, 2477.038 - 1399.897+298.793))
=11575.393

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


Italgas SpA  (FRA:I10) 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, Italgas SpA's WACC % is 3.57%. Italgas SpA's ROIC % is 5.63% (calculated using TTM income statement data). Italgas SpA 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. Italgas 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 %, 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.


Italgas SpA ROIC % Related Terms

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Italgas SpA Business Description

Traded in Other Exchanges
Address
Via Carlo Bo 11, Milano, ITA, 20143
Italgas SpA is an Italy-based company engaged in the business of natural gas distribution. The distribution service consists of transporting gas through local pipeline networks, from points of delivery at the reduction and measurement stations interconnected with the transport networks up to the final delivery points to customers. In addition, the company is also engaged in metering activities, which consist of determining, gathering, making available, and archiving metering data on natural gas withdrawn over the distribution networks. It derives a majority of its revenue from natural gas distribution activity. The other activities of the company are the distribution and sale of water and providing technical, engineering, IT assistance, and other services.

Italgas SpA Headlines

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