DocuSign (DocuSign) ROC %

: 1.16% (As of Jan. 2024)

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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. DocuSign's annualized return on capital (ROC %) for the quarter that ended in Jan. 2024 was 1.16%.

As of today (2024-04-19), DocuSign's WACC % is 11.06%. DocuSign's ROC % is 1.47% (calculated using TTM income statement data). DocuSign earns returns that do not match up to its cost of capital. It will destroy value as it grows.

DocuSign ROC % Historical Data

The historical data trend for DocuSign'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.

DocuSign Annual Data

Trend

Jan16

Jan17

Jan18

Jan19

Jan20

Jan21

Jan22

Jan23

Jan24

ROC %

-14.95

-9.90

-2.81

-2.19

1.53

DocuSign Quarterly Data
	Apr19	Jul19	Oct19	Jan20	Apr20	Jul20	Oct20	Jan21	Apr21	Jul21	Oct21	Jan22	Apr22	Jul22	Oct22	Jan23	Apr23	Jul23	Oct23	Jan24
ROC %																-	0.27	0.29	2.61	1.16

DocuSign ROC % Calculation

DocuSign's annualized Return on Capital (ROC %) for the fiscal year that ended in Jan. 2024 is calculated as:

	ROC % (A: Jan. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jan. 2023 )	+	Invested Capital (A: Jan. 2024 ))	/ count )
=	62.015 * ( 1 - 21.03% )	/	( (3464.658	+	2941.178)	/ 2 )
=	48.9732455	/	3202.918
=	1.53 %

where

	Invested Capital		(A: Jan. 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	))
=	3012.72	-	125.38	-	( 1031.666	-	max(0, 2208.322	-	1631.004	+	1031.666	))
=	3464.658

	Invested Capital		(A: Jan. 2024 )
=	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	))
=	2971.29	-	123.066	-	( 1045.462	-	max(0, 1660.621	-	1567.667	+	1045.462	))
=	2941.178

DocuSign's annualized Return on Capital (ROC %) for the quarter that ended in Jan. 2024 is calculated as:

	ROC % (Q: Jan. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Oct. 2023 )	+	Invested Capital (Q: Jan. 2024 ))	/ count )
=	40.092 * ( 1 - 8.41% )	/	( (3369.736	+	2941.178)	/ 2 )
=	36.7202628	/	3155.457
=	1.16 %

where

	Invested Capital		(Q: Oct. 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	))
=	3337.627	-	114.429	-	( 1590.217	-	max(0, 2189.221	-	2042.683	+	1590.217	))
=	3369.736

	Invested Capital		(Q: Jan. 2024 )
=	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	))
=	2971.29	-	123.066	-	( 1045.462	-	max(0, 1660.621	-	1567.667	+	1045.462	))
=	2941.178

Note: The Operating Income data used here is four times the quarterly (Jan. 2024) data.

DocuSign (NAS:DOCU) 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, DocuSign's WACC % is 11.06%. DocuSign's ROC % is 1.47% (calculated using TTM income statement data). DocuSign 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.

DocuSign ROC % Related Terms

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DocuSign (DocuSign) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » DocuSign Inc (NAS:DOCU) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

DOCU:Mexico DS3:Germany DS3:Germany D1OC34:Brazil

Address

221 Main Street, Suite 1550, San Francisco, CA, USA, 94105

Website

https://www.docusign.com

DocuSign offers the Agreement Cloud, a broad cloud-based software suite that enables users to automate the agreement process and provide legally binding e-signatures from nearly any device. The company was founded in 2003 and completed its IPO in May 2018.

Executives

Allan C. Thygesen	director, officer: President and CEO	20 DAVIS DRIVE, BELMONT CA 94002
Stephen Shute	officer: President, Field Operations	221 MAIN STREET, SUITE 1550, SAN FRANCISCO CA 94105
Blake Jeffrey Grayson	officer: Chief Financial Officer	2212 EVERETT AVENUE E, SEATTLE WA 98102
Teresa Briggs	director	2225 LAWSON LANE, SANTA CLARA CA 95054
James P Shaughnessy	officer: Chief Legal Officer	4460 HACIENDA DR., PLEASANTON CA 94588
Daniel D. Springer	director, officer: President and CEO	C/O DOCUSIGN, INC., 221 MAIN ST., SUITE 1000, SAN FRANCISCO CA 94105
Anna Marrs	director	200 VESEY STREET, NEW YORK NY 10285
Enrique T Salem	director	SYMANTEC CORPORATION, 20330 STEVENS CREEK BLVD., CUPERTINO CA 95014
Robert Chatwani	officer: President General Mgr, Growth	221 MAIN STREET, SUITE 1550, SAN FRANCISCO CA 94105
Inhi Cho Suh	officer: President, Product Engineering	C/O DOCUSIGN, INC., 221 MAIN STREET, SUITE 1000, SAN FRANCISCO CA 94105
Scott V. Olrich	officer: Chief Strategy and Marketing	C/O DOCUSIGN, INC., 221 MAIN ST., SUITE 1000, SAN FRANCISCO CA 94105
Cynthia Gaylor	director	C/O PIVOTAL SOFTWARE, INC., 875 HOWARD STREET, FIFTH FLOOR, SAN FRANCISCO CA 94103
Tram T Phi	officer: SVP, General Counsel	C/O DOCUSIGN, INC., 221 MAIN STREET, SUITE 1550, SAN FRANCISCO CA 94105
Peter Solvik	director	2105 SOUTH BASCOM AVE. #370, CAMPBELL CA 95008
Loren Alhadeff	officer: Chief Revenue Officer	C/O DOCUSIGN, INC., SUITE 1000, SAN FRANCISCO CA 94105