ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Transcom WorldWide's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2014 was 4.62%.
As of today (2024-05-27), Transcom WorldWide's WACC % is 1.25%. Transcom WorldWide's ROIC % is -11.01% (calculated using TTM income statement data).
Transcom WorldWide earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Transcom WorldWide ROIC % Historical Data
The historical data trend for Transcom WorldWide'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.
Competitive Comparison of Transcom WorldWide's ROIC %
For the Specialty Business Services subindustry, Transcom WorldWide'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.
Transcom WorldWide's ROIC % Distribution in the Business Services Industry
For the Business Services industry and Industrials sector, Transcom WorldWide's ROIC % distribution charts can be found below:
* The bar in red indicates where Transcom WorldWide's ROIC % falls into.
Transcom WorldWide ROIC % Calculation
Transcom WorldWide's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2013 is calculated as:
Note:
The Operating Income data used here is four times the quarterly (Sep. 2014) 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.
Transcom WorldWide (LTS:0GO2) 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, Transcom WorldWide's WACC % is 1.25%. Transcom WorldWide's ROIC % is -11.01% (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.
Transcom WorldWide ROIC % Related Terms
Thank you for viewing the detailed overview of Transcom WorldWide's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Transcom WorldWide (LTS:0GO2) Business Description
Transcom WorldWide SA was established in 1995. Together with its subsidiaries provide multi-language customer relationship management products and services ('CRM') and credit management services ('CMS'), including customer help lines and other telephone-based marketing and customer service programs ('teleservices') to clients in customer-intensive industries. The Group has two primary sources of revenues being its CRM (Customer Relationship Management) and its CMS (Credit Management Services) businesses. In relation to its CRM business, revenue mainly arise from call services operations. In relation to its CMS business, revenue mainly arise from fees and commissions generated from the collection of receivables on behalf of customers. The Company's operating segments are North Europe CRM (Denmark, Netherlands, Norway, Sweden, Estonia, Latvia and Lithuania), Central & South Europe CRM (Austria, Belgium, Croatia, Germany, Hungary, Italy, luxembourg, Poland, Slovakia, Switzerland, and Tunisia), Iberia & latam CRM (Chile, Peru, Portugal and Spain), North America & Asia Pacific CRM (Canada, the Philippines, USA, the United Kingdom and Australia), and CMS (Austria, the Czech Republic, the United Kingdom, Poland, Denmark, Norway and Sweden).
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
LTS:0GO2 has been successfully added to your 