Vital Healthcare Property Trust (NZSE:VHP) ROIC % : 3.17% (As of Dec. 2023)

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What is Vital Healthcare Property Trust 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 %. Vital Healthcare Property Trust's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 3.17%.

As of today (2024-05-04), Vital Healthcare Property Trust's WACC % is 7.01%. Vital Healthcare Property Trust's ROIC % is 3.19% (calculated using TTM income statement data). Vital Healthcare Property Trust earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Vital Healthcare Property Trust ROIC % Historical Data

The historical data trend for Vital Healthcare Property Trust'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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Vital Healthcare Property Trust ROIC % Chart

Vital Healthcare Property Trust Annual Data

Trend

Jun14

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

ROIC %

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3.24

3.10

2.78

2.35

3.59

Vital Healthcare Property Trust Semi-Annual Data
	Dec13	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROIC %	Get a 7-Day Free Trial															2.42	2.21	5.27	3.23	3.17

Competitive Comparison of Vital Healthcare Property Trust's ROIC %

For the REIT - Healthcare Facilities subindustry, Vital Healthcare Property Trust'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.

Vital Healthcare Property Trust's ROIC % Distribution in the REITs Industry

For the REITs industry and Real Estate sector, Vital Healthcare Property Trust's ROIC % distribution charts can be found below:

* The bar in red indicates where Vital Healthcare Property Trust's ROIC % falls into.

Vital Healthcare Property Trust ROIC % Calculation

Vital Healthcare Property Trust's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jun. 2023 is calculated as:

	ROIC % (A: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2022 )	+	Invested Capital (A: Jun. 2023 ))	/ count )
=	107.84 * ( 1 - -12.37% )	/	( (3366.552	+	3377.305)	/ 2 )
=	121.179808	/	3371.9285
=	3.59 %

where

	Invested Capital		(A: Jun. 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	))
=	3399.834	-	31.946	-	( 22.055	-	max(0, 38.637	-	39.973	+	22.055	))
=	3366.552

	Invested Capital		(A: Jun. 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	))
=	3429.712	-	41.522	-	( 10.885	-	max(0, 51.923	-	115.309	+	10.885	))
=	3377.305

Vital Healthcare Property Trust's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROIC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	115.11 * ( 1 - 8.56% )	/	( (3377.305	+	3257.849)	/ 2 )
=	105.256584	/	3317.577
=	3.17 %

where

	Invested Capital		(Q: Jun. 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	))
=	3429.712	-	41.522	-	( 10.885	-	max(0, 51.923	-	115.309	+	10.885	))
=	3377.305

	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	))
=	3269.749	-	38.171	-	( 13.447	-	max(0, 52.528	-	26.257	+	13.447	))
=	3257.849

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

Vital Healthcare Property Trust (NZSE:VHP) 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, Vital Healthcare Property Trust's WACC % is 7.01%. Vital Healthcare Property Trust's ROIC % is 3.19% (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.

Vital Healthcare Property Trust ROIC % Related Terms

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Vital Healthcare Property Trust (NZSE:VHP) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Vital Healthcare Property Trust (NZSE:VHP) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

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Address

Level 17, HSBC Tower, 188 Quay Street, Auckland, NTL, NZL, 1010

Website

https://www.vitalhealthcareproperty.co.nz

Vital Healthcare Property Trust is a healthcare REIT. The vast majority of revenue is generated in Australia, followed by New Zealand. Most of the company's tenants are for-profit hospitals, followed by medical consultants and nonprofit hospitals. The company is focused on protecting the interests of investors and other stakeholders. The company considers merger and acquisition investment as a component of its operational growth strategy.

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