Brookfield Asset Management (Brookfield Asset Management) ROC %

: 0.59% (As of Dec. 2023)

View and export this data going back to 2022. Start your Free Trial

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Brookfield Asset Management's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 0.59%.

As of today (2024-04-19), Brookfield Asset Management's WACC % is 9.38%. Brookfield Asset Management's ROC % is 0.16% (calculated using TTM income statement data). Brookfield Asset Management earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Brookfield Asset Management ROC % Historical Data

The historical data trend for Brookfield Asset Management'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.

* Premium members only.

Brookfield Asset Management Annual Data

Trend

Dec20

Dec21

Dec22

Dec23

ROC %

10.99

-0.35

0.16

Brookfield Asset Management Quarterly Data
	Dec20	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROC %							-404.20	2.18	-0.69	0.55	0.59

Brookfield Asset Management ROC % Calculation

Brookfield Asset Management's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	52 * ( 1 - 92.46% )	/	( (2378	+	2566)	/ 2 )
=	3.9208	/	2472
=	0.16 %

where

	Invested Capital		(A: Dec. 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	))
=	3161	-	784	-	( 1	-	max(0, 784	-	783	+	1	))
=	2378

	Invested Capital		(A: 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	))
=	3205	-	864	-	( 9	-	max(0, 1120	-	895	+	9	))
=	2566

Brookfield Asset Management's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-68 * ( 1 - 122.11% )	/	( (2524	+	2566)	/ 2 )
=	15.0348	/	2545
=	0.59 %

where

	Invested Capital		(Q: Sep. 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	))
=	3170	-	814	-	( 12	-	max(0, 1003	-	835	+	12	))
=	2524

	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	))
=	3205	-	864	-	( 9	-	max(0, 1120	-	895	+	9	))
=	2566

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

Brookfield Asset Management (NYSE:BAM) 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, Brookfield Asset Management's WACC % is 9.38%. Brookfield Asset Management's ROC % is 0.16% (calculated using TTM income statement data). Brookfield Asset Management 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.

Brookfield Asset Management ROC % Related Terms

Thank you for viewing the detailed overview of Brookfield Asset Management's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.

Brookfield Asset Management (Brookfield Asset Management) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Brookfield Asset Management Ltd (NYSE:BAM) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

RW5:Germany RW5:Germany BAM:Canada

Address

181 Bay Street, Suite 100, Brookfield Place, Toronto, ON, CAN, M5H 2T3

Website

https://www.brookfield.com

Brookfield Asset Management Ltd engages in providing alternative asset management services through an ownership interest in a leading global alternative asset management business. It offers a range of alternative investment products to investors around the world including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies, and private wealth investors.