Headwaters (Headwaters) ROC % : 3.44% (As of Mar. 2017)

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What is Headwaters 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 %. Headwaters's annualized return on capital (ROC %) for the quarter that ended in Mar. 2017 was 3.44%.

As of today (2024-04-25), Headwaters's WACC % is 0.00%. Headwaters's ROC % is 0.00% (calculated using TTM income statement data). Headwaters earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Headwaters ROC % Historical Data

The historical data trend for Headwaters'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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Headwaters ROC % Chart

Headwaters Annual Data

Trend

Sep07

Sep08

Sep09

Sep10

Sep11

Sep12

Sep13

Sep14

Sep15

Sep16

ROC %

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6.62

7.37

9.83

54.50

8.72

Headwaters Quarterly Data
	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15	Dec15	Mar16	Jun16	Sep16	Dec16	Mar17
ROC %	Get a 7-Day Free Trial															4.00	11.91	10.86	4.73	3.44

Headwaters ROC % Calculation

Headwaters's annualized Return on Capital (ROC %) for the fiscal year that ended in Sep. 2016 is calculated as:

	ROC % (A: Sep. 2016 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Sep. 2015 )	+	Invested Capital (A: Sep. 2016 ))	/ count )
=	110.71 * ( 1 - 31.42% )	/	( (706.791	+	1033.783)	/ 2 )
=	75.924918	/	870.287
=	8.72 %

where

	Invested Capital		(A: Sep. 2015 )
=	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	))
=	979.019	-	129.631	-	( 142.597	-	max(0, 133.881	-	344.211	+	142.597	))
=	706.791

	Invested Capital		(A: Sep. 2016 )
=	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	))
=	1238.443	-	139.362	-	( 65.298	-	max(0, 147.147	-	304.754	+	65.298	))
=	1033.783

Headwaters's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2017 is calculated as:

	ROC % (Q: Mar. 2017 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2016 )	+	Invested Capital (Q: Mar. 2017 ))	/ count )
=	58.7 * ( 1 - 39.16% )	/	( (1030.276	+	1048.88)	/ 2 )
=	35.71308	/	1039.578
=	3.44 %

where

	Invested Capital		(Q: Dec. 2016 )
=	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	))
=	1220.195	-	119.061	-	( 70.858	-	max(0, 119.061	-	284.325	+	70.858	))
=	1030.276

	Invested Capital		(Q: Mar. 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	))
=	1229.637	-	122.629	-	( 58.128	-	max(0, 122.629	-	294.607	+	58.128	))
=	1048.88

Note: The Operating Income data used here is four times the quarterly (Mar. 2017) data.

Headwaters (NYSE:HW) 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, Headwaters's WACC % is 0.00%. Headwaters's ROC % is 0.00% (calculated using TTM income statement data). Headwaters 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.

Headwaters ROC % Related Terms

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Headwaters (Headwaters) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Building Materials » Headwaters Inc (NYSE:HW) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

Website

http://www.headwaters.com

Headwaters is a manufacturer of building products for the residential construction, residential remodelling, commercial, and industrial construction industries. The range of products includes architectural stone, resin-based exterior-siding accessories, roofing, trim board, decking, railing, concrete block and brick, windows, and other building products. Headwaters sells its products to wholesale distributors in the United States or big-box stores, as well as through an in-house direct salesforce.

Executives

Donald P Newman	officer: Chief Financial Officer	224 S 108TH AVENUE, OMAHA NE 68154
Sylvia Summers	director	200 FLYNN ROAD, CAMARILLO CA 93012
Malyn K Malquist	director	10653 S. RIVER FRONT PARKWAY, SUITE 300, SOUTH JORDAN UT 84095
Ej Jake Garn	director	10653 SOUTH RIVER FRONT PARKWAY, SUITE 300, SOUTH JORDAN UT 84095
Scott K Sorensen	officer: Chief Financial Officer	10653 S. RIVER FRONT PARKWAY, SUITE 300, SOUTH JORDAN UT 84095