Equifax (NYSE:EFX) ROC %

: 4.71% (As of Dec. 2022)

View and export this data going back to 1971. 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 %. Equifax's annualized return on capital (ROC %) for the quarter that ended in Dec. 2022 was 4.71%.

As of today (2023-03-22), Equifax's WACC % is 9.20%. Equifax's ROC % is 6.81% (calculated using TTM income statement data). Equifax earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Equifax ROC % Historical Data

The historical data trend for Equifax'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.

Equifax Annual Data

Trend

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

ROC %

5.45

-4.33

6.28

8.77

6.89

Equifax Quarterly Data
	Mar18	Jun18	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22
ROC %																8.57	8.33	7.78	6.31	4.71

Equifax ROC % Calculation

Equifax's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2022 is calculated as:

	ROC % (A: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2021 )	+	Invested Capital (A: Dec. 2022 ))	/ count )
=	1056 * ( 1 - 24.69% )	/	( (11504.3	+	11574.1)	/ 2 )
=	795.2736	/	11539.2
=	6.89 %

where

	Invested Capital		(A: Dec. 2021 )
=	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	))
=	11040.9	-	707	-	( 224.7	-	max(0, 2291.3	-	1120.9	+	224.7	))
=	11504.3

	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	))
=	11547.9	-	618.5	-	( 285.2	-	max(0, 2015.2	-	1370.5	+	285.2	))
=	11574.1

Equifax's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2022 is calculated as:

	ROC % (Q: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2022 )	+	Invested Capital (Q: Dec. 2022 ))	/ count )
=	704 * ( 1 - 22.84% )	/	( (11477.9	+	11574.1)	/ 2 )
=	543.2064	/	11526
=	4.71 %

where

	Invested Capital		(Q: Sep. 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	))
=	11308	-	553.9	-	( 241.7	-	max(0, 2018.7	-	1294.9	+	241.7	))
=	11477.9

	Invested Capital		(Q: 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	))
=	11547.9	-	618.5	-	( 285.2	-	max(0, 2015.2	-	1370.5	+	285.2	))
=	11574.1

Note: The Operating Income data used here is four times the quarterly (Dec. 2022) data.

Equifax (NYSE:EFX) 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, Equifax's WACC % is 9.20%. Equifax's ROC % is 6.81% (calculated using TTM income statement data). Equifax 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.

Equifax ROC % Related Terms

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

Equifax (NYSE:EFX) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Business Services » Equifax Inc (NYSE:EFX) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

EFX:Germany E1FX34:Brazil EFX:Austria

Address

1550 Peachtree Street N.W., Atlanta, GA, USA, 30309

Website

https://www.equifax.com

Along with Experian and TransUnion, Equifax is one of the leading credit bureaus in the United States. Equifax's credit reports provide credit histories on millions of consumers, and the firm's services are critical to lenders' credit decisions. In addition, about a third of the firm's revenue comes from workforce solutions, which provides income verification and employer human resources services. Equifax generates over 20% of its revenue from outside the United States.

Executives

Lisa M Nelson	officer: President-International	EQUIFAX INC., 1550 PEACHTREE STREET NW, ATLANTA GA 30309
Audrey B Tillman	director	1932 WYNNTON RD, COLUMBUS GA 31999
Melissa D Goodwin	director	C/O WRIGHT EXPRESS CORPORATION, 97 DARLING AVENUE, SOUTH PORTLAND ME 04106
Sunil Bindal	officer: SVP, Corp Development	EQUIFAX INC., 1550 PEACHTREE STREET NW, ATLANTA GA 30309
Lindsay B Parker	officer: Chief Marketing Officer	EQUIFAX INC, 1550 PEACHTREE STREET NW, ATLANTA GA 30309
Beverly J Anderson	officer: Pres-Global Consumer Solutions	1550 PEACHTREE STREET NW, ATLANTA GA 30309
Robert W Selander	director	MASTERCARD INTERNATIONAL, 2000 PURCHASE STREET, PURCHASE NY 10577
Robert D Marcus	director	C/O TIME WARNER CABLE INC., 60 COLUMBUS CIRCLE, 17TH FLOOR, NEW YORK NY 10023
John A Mckinley	director	C/O EQUIFAX INC, 1550 PEACHTREE STREET NW, ATLANTA GA 30309
Elane B Stock	director	351 PHELPS DRIVE, IRVING TX 75038
Carla Chaney	officer: CVP & Chief HR Officer	5302 LAKE VIEW CLUB, DUNWOODY GA 30338
G. Thomas Hough	director	P.O. BOX 407, LAKELAND FL 33802
Heather H Wilson	director	1550 PEACHTREE STREET NW, ATLANTA GA 30309
Sid Singh	officer: President - USIS	1550 PEACHTREE STREET NW, ATLANTA GA 30309
James M Griggs	officer: SVP & Corp Controller	1550 PEACHTREE STREET NW, ATLANTA GA 30309