Paints and Chemical Industries Co (LSE:47KT) ROIC % : 15.28% (As of Jun. 2018)

View and export this data going back to 2012. Start your Free Trial

What is Paints and Chemical Industries Co 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 %. Paints and Chemical Industries Co's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2018 was 15.28%.

As of today (2024-05-26), Paints and Chemical Industries Co's WACC % is 0.00%. Paints and Chemical Industries Co's ROIC % is 17.70% (calculated using TTM income statement data). Paints and Chemical Industries Co 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.

Paints and Chemical Industries Co ROIC % Historical Data

The historical data trend for Paints and Chemical Industries Co'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.

Paints and Chemical Industries Co ROIC % Chart

Paints and Chemical Industries Co Annual Data

Trend

Jun17

Jun18

ROIC %

10.55

15.28

Paints and Chemical Industries Co Semi-Annual Data
	Jun17	Jun18
ROIC %	10.55	15.28

Competitive Comparison of Paints and Chemical Industries Co's ROIC %

For the Specialty Chemicals subindustry, Paints and Chemical Industries Co'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.

Paints and Chemical Industries Co's ROIC % Distribution in the Chemicals Industry

For the Chemicals industry and Basic Materials sector, Paints and Chemical Industries Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Paints and Chemical Industries Co's ROIC % falls into.

Paints and Chemical Industries Co ROIC % Calculation

Paints and Chemical Industries Co's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jun. 2018 is calculated as:

	ROIC % (A: Jun. 2018 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2017 )	+	Invested Capital (A: Jun. 2018 ))	/ count )
=	5.671 * ( 1 - 21.95% )	/	( (30.244	+	27.7)	/ 2 )
=	4.4262155	/	28.972
=	15.28 %

where

	Invested Capital		(A: Jun. 2017 )
=	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	))
=	53.508	-	10.022	-	( 13.242	-	max(0, 14.475	-	37.311	+	13.242	))
=	30.244

	Invested Capital		(A: Jun. 2018 )
=	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	))
=	50.123	-	9.045	-	( 13.378	-	max(0, 10.777	-	34.446	+	13.378	))
=	27.7

Paints and Chemical Industries Co's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2018 is calculated as:

	ROIC % (Q: Jun. 2018 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2017 )	+	Invested Capital (Q: Jun. 2018 ))	/ count )
=	5.671 * ( 1 - 21.95% )	/	( (30.244	+	27.7)	/ 2 )
=	4.4262155	/	28.972
=	15.28 %

where

	Invested Capital		(Q: Jun. 2017 )
=	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	))
=	53.508	-	10.022	-	( 13.242	-	max(0, 14.475	-	37.311	+	13.242	))
=	30.244

	Invested Capital		(Q: Jun. 2018 )
=	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	))
=	50.123	-	9.045	-	( 13.378	-	max(0, 10.777	-	34.446	+	13.378	))
=	27.7

Note: The Operating Income data used here is one times the annual (Jun. 2018) data.

Paints and Chemical Industries Co (LSE:47KT) 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, Paints and Chemical Industries Co's WACC % is 0.00%. Paints and Chemical Industries Co's ROIC % is 17.70% (calculated using TTM income statement data). Paints and Chemical Industries Co 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. Paints and Chemical Industries Co 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.

Paints and Chemical Industries Co ROIC % Related Terms

Thank you for viewing the detailed overview of Paints and Chemical Industries Co's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.

Paints and Chemical Industries Co (LSE:47KT) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Chemicals » Paints and Chemical Industries Co (LSE:47KT) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

1, Elmassanie Street, P.O. Box 11887,Elamiriya, Cario, EGY

Website

http://www.pachin.net

Paints and Chemical Industries Co is an Egypt-based company engaged in the manufacturing of paints, varnishes, industrial chemicals, printing inks, animal extracts and other related products. The product portfolio of the group consists of Decorative paints, Industrial paints, Printing inks and alkyd resin. The majority of income for the group is generated through the sale of products. It also exports all the products of paints to Libya, Saudi Arabia, Syria, Cyprus, Kenya, Sudan, and Equatorial Guinea.

Paints and Chemical Industries Co (LSE:47KT) Headlines

No Headlines