British Polythene Industries (LSE:BPI) ROIC % : 9.60% (As of Dec. 2015)

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What is British Polythene Industries 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 %. British Polythene Industries's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2015 was 9.60%.

As of today (2024-05-30), British Polythene Industries's WACC % is 0.00%. British Polythene Industries's ROIC % is 0.00% (calculated using TTM income statement data). British Polythene Industries earns returns that do not match up to its cost of capital. It will destroy value as it grows.

British Polythene Industries ROIC % Historical Data

The historical data trend for British Polythene Industries'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.

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British Polythene Industries ROIC % Chart

British Polythene Industries Annual Data

Trend

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

Dec15

ROIC %

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11.02

10.22

10.06

11.86

12.39

British Polythene Industries Semi-Annual Data
	Jun06	Dec06	Jun07	Dec07	Jun08	Dec08	Jun09	Dec09	Jun10	Dec10	Jun11	Dec11	Jun12	Dec12	Jun13	Dec13	Jun14	Dec14	Jun15	Dec15
ROIC %	Get a 7-Day Free Trial															5.47	14.88	9.19	16.01	9.60

Competitive Comparison of British Polythene Industries's ROIC %

For the Packaging & Containers subindustry, British Polythene Industries'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.

British Polythene Industries's ROIC % Distribution in the Packaging & Containers Industry

For the Packaging & Containers industry and Consumer Cyclical sector, British Polythene Industries's ROIC % distribution charts can be found below:

* The bar in red indicates where British Polythene Industries's ROIC % falls into.

British Polythene Industries ROIC % Calculation

British Polythene Industries's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2015 is calculated as:

	ROIC % (A: Dec. 2015 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2014 )	+	Invested Capital (A: Dec. 2015 ))	/ count )
=	27.5 * ( 1 - 24.24% )	/	( (168.2	+	168.1)	/ 2 )
=	20.834	/	168.15
=	12.39 %

where

	Invested Capital		(A: Dec. 2014 )
=	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	))
=	250.4	-	81.7	-	( 0.5	-	max(0, 85.3	-	127.4	+	0.5	))
=	168.2

	Invested Capital		(A: Dec. 2015 )
=	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	))
=	249.5	-	80.9	-	( 0.5	-	max(0, 83.3	-	138.3	+	0.5	))
=	168.1

British Polythene Industries's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2015 is calculated as:

	ROIC % (Q: Dec. 2015 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2015 )	+	Invested Capital (Q: Dec. 2015 ))	/ count )
=	19 * ( 1 - 17.57% )	/	( (158.3	+	168.1)	/ 2 )
=	15.6617	/	163.2
=	9.60 %

where

	Invested Capital		(Q: Jun. 2015 )
=	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	))
=	254.2	-	93.9	-	( 2	-	max(0, 94.4	-	142.7	+	2	))
=	158.3

	Invested Capital		(Q: Dec. 2015 )
=	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	))
=	249.5	-	80.9	-	( 0.5	-	max(0, 83.3	-	138.3	+	0.5	))
=	168.1

Note: The Operating Income data used here is two times the semi-annual (Dec. 2015) data.

British Polythene Industries (LSE:BPI) 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, British Polythene Industries's WACC % is 0.00%. British Polythene Industries's ROIC % is 0.00% (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.

British Polythene Industries ROIC % Related Terms

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British Polythene Industries (LSE:BPI) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Packaging & Containers » British Polythene Industries PLC (LSE:BPI) » Definitions » ROIC %

Traded in Other Exchanges

N/A

Address

Website

http://www.bpipoly.com

British Polythene Industries PLC was incorporated on March 16, 1910. It manufactures and supplies polythene films and related products for packaging for the protection of food and other goods. Its products are in use across different market sectors with a focus on agriculture, retail food chain, healthcare and waste services. The Company also engages in recycling of waste polythene film in Europe. The Company has three reportable segments: UK and Ireland, Mainland Europe and North America. UK & Ireland includes all of the UK manufacturing and merchanting activities along with the Irish sales operation which distributes predominately UK manufactured products.It also includes the manufacturing operations in China. Mainland Europe comprises the manufacturing and merchanting activities located in Belgium, the Netherlands and France. North America comprises the manufacturing business in Canada with sales throughout North America and Canada.

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