Sipp Industries (Sipp Industries) ROIC % : 0.00% (As of Dec. 2006)

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What is Sipp 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 %. Sipp Industries's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2006 was 0.00%.

As of today (2024-05-27), Sipp Industries's WACC % is 0.00%. Sipp Industries's ROIC % is 0.00% (calculated using TTM income statement data). Sipp Industries earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Sipp Industries ROIC % Historical Data

The historical data trend for Sipp 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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Sipp Industries ROIC % Chart

Sipp Industries Annual Data

Trend

Dec04

Dec05

Dec06

ROIC %

Sipp Industries Semi-Annual Data
	Dec04	Dec05	Dec06
ROIC %	-	-	-

Competitive Comparison of Sipp Industries's ROIC %

For the Beverages - Brewers subindustry, Sipp 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.

Sipp Industries's ROIC % Distribution in the Beverages - Alcoholic Industry

For the Beverages - Alcoholic industry and Consumer Defensive sector, Sipp Industries's ROIC % distribution charts can be found below:

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

Sipp Industries ROIC % Calculation

Sipp Industries's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2006 is calculated as:

	ROIC % (A: Dec. 2006 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2005 )	+	Invested Capital (A: Dec. 2006 ))	/ count )
=	0 * ( 1 - % )	/	( (0.005	+	0.005)	/ 2 )
=	0	/	0.005
=	0.00 %

where

	Invested Capital		(A: Dec. 2005 )
=	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	))
=	0	-	0.004	-	( 0	-	max(0, 0.009	-	0	+	0	))
=	0.005

	Invested Capital		(A: Dec. 2006 )
=	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	))
=	0	-	0.001	-	( 0	-	max(0, 0.006	-	0	+	0	))
=	0.005

Sipp Industries's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2006 is calculated as:

	ROIC % (Q: Dec. 2006 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2005 )	+	Invested Capital (Q: Dec. 2006 ))	/ count )
=	0 * ( 1 - % )	/	( (0.005	+	0.005)	/ 2 )
=	0	/	0.005
=	0.00 %

where

	Invested Capital		(Q: Dec. 2005 )
=	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	))
=	0	-	0.004	-	( 0	-	max(0, 0.009	-	0	+	0	))
=	0.005

	Invested Capital		(Q: Dec. 2006 )
=	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	))
=	0	-	0.001	-	( 0	-	max(0, 0.006	-	0	+	0	))
=	0.005

Note: The Operating Income data used here is one times the annual (Dec. 2006) data.

Sipp Industries (OTCPK:SIPC) 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, Sipp Industries's WACC % is 0.00%. Sipp 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.

Sipp Industries ROIC % Related Terms

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Sipp Industries (Sipp Industries) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Beverages - Alcoholic » Sipp Industries Inc (OTCPK:SIPC) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

600 Anton Boulevard, Suite 1100, Costa Mesa, CA, USA, 92626

Website

http://www.sippindustries.com

Sipp Industries Inc is a is a brand owner of craft hemp beer and spirits. It forms strategic partnerships with craft breweries and distilleries to produce its products. The Company partners with local and national distributors to promote and market the beverages to events, bars, restaurants, lounges, clubs, and retail stores.