Market Cap : 820.33 M | Enterprise Value : 798.54 M | PE Ratio : 22.46 | PB Ratio : 10.07 |
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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 %. National Research's annualized return on capital (ROC %) for the quarter that ended in Mar. 2022 was 32.78%.
As of today (2022-05-23), National Research's WACC % is 6.38%. National Research's ROC % is 35.11% (calculated using TTM income statement data). National Research generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.
The historical data trend for National Research'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.
National Research's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2021 is calculated as:
ROC % (A: Dec. 2021 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (A: Dec. 2020 ) | + | Invested Capital (A: Dec. 2021 )) | / count ) |
= | 50.27 * ( 1 - 22.94% ) | / | ( (100.253 | + | 106.645) | / 2 ) |
= | 38.738062 | / | 103.449 | |||
= | 37.45 % |
where
Invested Capital | (A: Dec. 2020 ) | |||||||||||
= | 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 | )) |
= | 133.423 | - | 10.739 | - | ( 34.69 | - | max(0, 31.681 | - | 54.112 | + | 34.69 | )) |
= | 100.253 |
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 | )) |
= | 157.54 | - | 17.576 | - | ( 54.361 | - | max(0, 40.388 | - | 73.707 | + | 54.361 | )) |
= | 106.645 |
National Research's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2022 is calculated as:
ROC % (Q: Mar. 2022 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Dec. 2021 ) | + | Invested Capital (Q: Mar. 2022 )) | / count ) |
= | 46.788 * ( 1 - 25.31% ) | / | ( (106.645 | + | 106.589) | / 2 ) |
= | 34.9459572 | / | 106.617 | |||
= | 32.78 % |
where
Invested Capital | (Q: 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 | )) |
= | 157.54 | - | 17.576 | - | ( 54.361 | - | max(0, 40.388 | - | 73.707 | + | 54.361 | )) |
= | 106.645 |
Invested Capital | (Q: Mar. 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 | )) |
= | 153.154 | - | 19.213 | - | ( 47.29 | - | max(0, 41.569 | - | 68.921 | + | 47.29 | )) |
= | 106.589 |
Note: The Operating Income data used here is four times the quarterly (Mar. 2022) data.
* 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.
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, National Research's WACC % is 6.38%. National Research's ROC % is 35.11% (calculated using TTM income statement data). National Research generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.
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.
Thank you for viewing the detailed overview of National Research's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Jackson Steven D. | officer: President | C/O NATIONAL RESEARCH CORPORATION 1245 Q STREET LINCOLN NE 68508 |
Martin Joann M | director | 6221 ANDREW COURT LINCOLN NE 68512 |
Nunnelly John N | director | P.O. BOX 2175 AMHERST MA 01004 |
Karas Kevin R | officer: SVP Finance, CFO, Treas & Secy | C/O NATIONAL RESEARCH CORPORATION 1245 Q STREET LINCOLN NE 68508 |
Berwick Donald M | director | C/O NATIONAL RESEARCH CORPORATION 1245 Q STREET LINCOLN NE 68508 |
Mowry Barbara | director | P.O. BOX 103115 DENVER CO 80250 |
Amandla Mk Trust | 10 percent owner | C/O THE BRYN MAWR TRUST COMPANY OF DELAW 20 MONTCHANIN RD, SUITE 100 GREENVILLE DE 19807 |
Hays Michael D. | director, officer: CEO | C/O NATIONAL RESEARCH CORPORATION 1245 Q STREET LINCOLN NE 68508 |
K/i/e Trust Under Agreement 10/24/18 | 10 percent owner | C/O BESSEMER TRUST COMPANY OF DELAWARE 1007 N. ORANGE ST., SUITE 1450 WILMINGTON DE 19801 |
Endacott Kent E. | 10 percent owner | C/O WOODS & AITKEN LLP 301 SOUTH 13TH STREET, SUITE 500 LINCOLN NE 68508 |
Beans Patrick E | director, officer: CFO and Secretary | AMANDLA LLC 709 PIER 2 LINCOLN NE 68528 |
Warden Gail L | director | 250 WASHINGTON RD GROSSE POINTE MI 48230 |
Henricks Susan L | officer: President and COO | C/O NATIONAL RESEARCH CORPORATION 1245 Q STREET LINCOLN NE 68508 |
Schorr Paul C Iii | director | PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: SCHORR PAUL C III a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;} |
Peetz Jeffery T | 10 percent owner | WOODS & AITKEN LLP 301 SOUTH 13TH STREET, SUITE 500 LINCOLN NE 68508 |
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By Seekingalpha 2022-02-09