ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Park24 Co's annualized return on invested capital (ROIC %) for the quarter that ended in Jan. 2024 was 8.52%.
As of today (2024-05-07), Park24 Co's WACC % is 4.66%. Park24 Co's ROIC % is 8.29% (calculated using TTM income statement data).
Park24 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.
Park24 Co ROIC % Historical Data
The historical data trend for Park24 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.
For the Infrastructure Operations subindustry, Park24 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.
Park24 Co's ROIC % Distribution in the Construction Industry
For the Construction industry and Industrials sector, Park24 Co's ROIC % distribution charts can be found below:
* The bar in red indicates where Park24 Co's ROIC % falls into.
Park24 Co ROIC % Calculation
Park24 Co's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Oct. 2023 is calculated as:
Note:
The Operating Income data used here is four times the quarterly (Jan. 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.
Park24 Co (OTCPK:PKCOY) 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, Park24 Co's WACC % is 4.66%. Park24 Co's ROIC % is 8.29% (calculated using TTM income statement data).
Park24 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.
Park24 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.
Park24 Co ROIC % Related Terms
Thank you for viewing the detailed overview of Park24 Co's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Park24 Co Ltd is a Japanese operator of parking facilities. The company is organised into two segments: parking business Japan, Parking Business International and mobility business. The parking business, which contributes the majority of revenue, operates fully-automated parking facilities and related services. The Parking business in international segment provides Parking facility management in overseas. The mobility business car rental services through the Times Car RENTAL brand, car sharing services through the Times Car PLUS brand, and related services. While Park 24 operates in Japan, Taiwan, and South Korea, the company earns the majority of revenue domestically.
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