Advanced Drainage Systems (Advanced Drainage Systems) Owner Earnings per Share (TTM) : 7.80 (As of Dec. 2023)

Advanced Drainage Systems Owner Earnings per Share (TTM) Chart

Advanced Drainage Systems Annual Data
	Trend	Mar14	Mar15	Mar16	Mar17	Mar18	Mar19	Mar20	Mar21	Mar22	Mar23
Owner Earnings per Share (TTM)		Get a 7-Day Free Trial					1.43	-0.95	4.39	1.41	7.12

Advanced Drainage Systems Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Owner Earnings per Share (TTM)	Get a 7-Day Free Trial															7.02	7.12	7.35	7.69	7.80

Competitive Comparison of Advanced Drainage Systems's Owner Earnings per Share (TTM)

For the Building Products & Equipment subindustry, Advanced Drainage Systems's Price-to-Owner-Earnings, along with its competitors' market caps and Price-to-Owner-Earnings 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.

Advanced Drainage Systems's Price-to-Owner-Earnings Distribution in the Construction Industry

For the Construction industry and Industrials sector, Advanced Drainage Systems's Price-to-Owner-Earnings distribution charts can be found below:

* The bar in red indicates where Advanced Drainage Systems's Price-to-Owner-Earnings falls into.

Advanced Drainage Systems Owner Earnings per Share (TTM) Calculation

In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume. (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

To make it simple, then you will have:

Owner Earnings per Share (TTM) = (Net Income + Depreciation, Depletion and Amortization + Change In Deferred Tax - 5Y Average of Maintenance Capital Expenditure + Change In Working Capital) / Shares Outstanding (Diluted Average)

Advanced Drainage Systems's Owner Earnings per Share (TTM) Calculation:

1. Start with "Net Income" from income statement. Advanced Drainage Systems's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was $501 Mil.

2. "Depreciation, Depletion and Amortization" is from cashflow statement. Advanced Drainage Systems's Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Dec. 2023 was $150 Mil. This needs to be added back because company does not actually need to pay cash for it. It is a non-cash item.

3. Other non-cash charges usually include "Stock Based Compensation" and "Change In Deferred Tax":
However, to be conservative, GuruFocus will not add Stock Based Compensation back to net income. Advanced Drainage Systems's Change In Deferred Tax for the trailing twelve months (TTM) ended in Dec. 2023 was $-5 Mil.

4. Average maintenance capital expenditure over a business/industry cycle: 5-Year Average Maintenance Capital Expenditure = $110 Mil

It is usually best to take a long-term average of maintenance capital expenditure. Ideally this would be as long as 10 years and include at least one economic downturn. However, since many companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year maintenance capital expenditure.

The following shows how to get maintenance capital expenditure.

First, calculate the revenue change regarding to the previous quarter. If the revenue decreased from the previous quarter, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous quarter, then calculate the percentage of Net PPE as of corresponding Revenue.
Growth Capital Expenditure = Percentage of Property, Plant and Equipment as of corresponding Revenue * Revenue Increase
Third, calculate Capital Expenditure (positive) - Growth Capital Expenditure.
If [Capital Expenditure (positive) - Growth Capital Expenditure] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - Growth Capital Expenditure] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - Growth Capital Expenditure.
Fourth, get the average of the 5 years maintenance capital expenditure.

Advanced Drainage Systems's 5-Year Average Maintenance Capital Expenditure = $110 Mil

5. "Change In Working Capital" is from cashflow statement. Advanced Drainage Systems's Change In Working Capital for the trailing twelve months (TTM) ended in Dec. 2023 was $77 Mil.
Note: GuruFocus' Change in Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And sometimes it includes non-current parts of assets and liabilities.

6. Advanced Drainage Systems's Shares Outstanding (Diluted Average) for the months ended in Dec. 2023 was 78.586 Mil.

Advanced Drainage Systems's Onwer Earnings Per Share for Dec. 2023 is calculated as:

* 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.

Be Aware

Assumption: Companies usually do not report maintenance capital expenditures and growth capital expenditures separately. Here we use estimated numbers and average them over 5 years. The method to estimate maintenance capital expenditures can be found in above part 4.

Note: GuruFocus' Change In Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And it includes non-current parts of assets and liabilities.

Advanced Drainage Systems Owner Earnings per Share (TTM) Related Terms

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Advanced Drainage Systems (Advanced Drainage Systems) Business Description