ARRIS International (ARRIS International) ROC % : 5.70% (As of Dec. 2018)

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What is ARRIS International ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. ARRIS International's annualized return on capital (ROC %) for the quarter that ended in Dec. 2018 was 5.70%.

As of today (2024-05-03), ARRIS International's WACC % is 0.00%. ARRIS International's ROC % is 0.00% (calculated using TTM income statement data). ARRIS International earns returns that do not match up to its cost of capital. It will destroy value as it grows.

ARRIS International ROC % Historical Data

The historical data trend for ARRIS International's ROC % 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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ARRIS International ROC % Chart

ARRIS International Annual Data

Trend

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

ROC %

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17.47

6.42

2.49

16.08

5.53

ARRIS International Quarterly Data
	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15	Dec15	Mar16	Jun16	Sep16	Dec16	Mar17	Jun17	Sep17	Dec17	Mar18	Jun18	Sep18	Dec18
ROC %	Get a 7-Day Free Trial															1.75	2.75	7.04	6.73	5.70

ARRIS International ROC % Calculation

ARRIS International's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2018 is calculated as:

	ROC % (A: Dec. 2018 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2017 )	+	Invested Capital (A: Dec. 2018 ))	/ count )
=	224.207 * ( 1 - -29.35% )	/	( (5534.29	+	4961.312)	/ 2 )
=	290.0117545	/	5247.801
=	5.53 %

where

	Invested Capital		(A: Dec. 2017 )
=	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	))
=	7624.257	-	1578.52	-	( 511.447	-	max(0, 1933.269	-	2913.54	+	511.447	))
=	5534.29

	Invested Capital		(A: Dec. 2018 )
=	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	))
=	7327.869	-	1631.086	-	( 735.471	-	max(0, 1967.767	-	3112.639	+	735.471	))
=	4961.312

ARRIS International's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2018 is calculated as:

	ROC % (Q: Dec. 2018 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2018 )	+	Invested Capital (Q: Dec. 2018 ))	/ count )
=	273.792 * ( 1 - -5.4% )	/	( (5164.351	+	4961.312)	/ 2 )
=	288.576768	/	5062.8315
=	5.70 %

where

	Invested Capital		(Q: Sep. 2018 )
=	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	))
=	7186.605	-	1501.857	-	( 520.397	-	max(0, 1848.595	-	2843.385	+	520.397	))
=	5164.351

	Invested Capital		(Q: Dec. 2018 )
=	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	))
=	7327.869	-	1631.086	-	( 735.471	-	max(0, 1967.767	-	3112.639	+	735.471	))
=	4961.312

Note: The Operating Income data used here is four times the quarterly (Dec. 2018) data.

ARRIS International (NAS:ARRS) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. 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 ROC % 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, ARRIS International's WACC % is 0.00%. ARRIS International's ROC % is 0.00% (calculated using TTM income statement data). ARRIS International 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 %, ROC % 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.

ARRIS International ROC % Related Terms

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ARRIS International (ARRIS International) Business Description

Industry

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Address

3871 Lakefield Drive, Suwanee, GA, USA, 30024

Website

https://www.arris.com

ARRIS International PLC is a media entertainment and data communications solutions provider. Its innovations combine hardware, software, and services across the cloud, network, and home to power TV and Internet for millions of people around the globe. It operates in two business segments, Customer Premises Equipment, and Network & Cloud. It specializes in enabling multichannel video programming distribution including cable, telephone, and digital broadcast satellite operatorion. It operates manufacturing facilities in Taipei, Taiwan; Tijuana, Mexico, and Manaus, Brazil.