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Chubb ROC %

: 3.10% (As of Jun. 2022)
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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 %. Chubb's annualized return on capital (ROC %) for the quarter that ended in Jun. 2022 was 3.10%.

As of today (2022-09-26), Chubb's WACC % is 4.36%. Chubb's ROC % is 4.38% (calculated using TTM income statement data). Chubb 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.


Chubb ROC % Historical Data

The historical data trend for Chubb'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.

Chubb Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
ROC %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.01 2.97 3.18 2.42 5.15

Chubb Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
ROC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 5.52 4.45 5.11 4.75 3.10

Chubb ROC % Calculation

Chubb'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
=EBIT * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2020 ) + Invested Capital (A: Dec. 2021 ))/ count )
=10308 * ( 1 - 13.01% )/( (170066.7 + 178196.15)/ 2 )
=8966.9292/174131.425
=5.15 %

where

Invested Capital(A: Dec. 2020 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash and cash equivalents - 5% * Revenue )
=190774 - 20760 - ( 1747 - 5% * 35994 )
=170066.7

Invested Capital(A: Dec. 2021 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash and cash equivalents - 5% * Revenue )
=200054 - 22247 - ( 1659 - 5% * 40963 )
=178196.15

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

ROC % (Q: Jun. 2022 )
=NOPAT/Average Invested Capital
=EBIT * ( 1 - Tax Rate % )/( (Invested Capital (Q: Mar. 2022 ) + Invested Capital (Q: Jun. 2022 ))/ count )
=6568 * ( 1 - 19.43% )/( (174424.45 + 166622.05)/ 2 )
=5291.8376/170523.25
=3.10 %

where

Invested Capital(Q: Mar. 2022 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash and cash equivalents - 5% * Revenue )
=197990 - 22315 - ( 1734 - 5% * 9669 )
=174424.45

Invested Capital(Q: Jun. 2022 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Cash and cash equivalents - 5% * Revenue )
=195651 - 22404 - ( 7122 - 5% * 9941 )
=166622.05

Note: The EBIT data used here is four times the quarterly (Jun. 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.


Chubb  (NYSE:CB) 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, Chubb's WACC % is 4.36%. Chubb's ROC % is 4.38% (calculated using TTM income statement data). Chubb 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.


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.


Chubb ROC % Related Terms

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


Chubb Business Description

Chubb logo
Traded in Other Exchanges
Address
Baerengasse 32, Zurich, CHE, CH-8001
ACE acquired Chubb in the first quarter of 2016 and assumed the Chubb name. The combination makes the new Chubb one of the largest domestic property and casualty insurers, with operations in 54 countries spanning commercial and personal P&C insurance, reinsurance, and life insurance.
Executives
Bonanno Kathleen director 3000 TANNERY WAY SANTA CLARA CA 95054
Enns Peter C. officer: Executive Vice President and* THE CHUBB BUILDING 17 WOODBOURNE AVENUE HAMILTON D0 HM 08
Tellez Luis director DESC, S.A. DE C.V PASEO DE LOS TAMARINDOS TORRE PISO 32 CUAJIMALPA O5 05120
Townsend Frances F director C/O BAKER BOTTS LLP THE WARNER, 1299 PENNSYLVANIA AVE., NW WASHINGTON DC 20004-2400
Hugin Robert J director C/O THE MEDICINES CO 8 CAMPUS DR PARSIPPANY NJ 07054
Hagan Annmarie T officer: Chief Accounting Officer TWO LIBERTY PLACE 1601 CHESTNUT STREET PHILADELPHIA PA 19192
Ortega Juan Luis officer: Executive Vice President* CHUBB AVENUE OF THE AMERICAS NEW YORK NY 10036
Andrade Juan C officer: Executive Vice President* THE HARTFORD ONE HARTFORD PLAZA HARTFORD CT 06155
Krump Paul J officer: Executive Vice President* C/O CHUBB & SON 15 MOUNTAIN VIEW RD P O BOX161 WARREN NJ 07061-1615
Kellner Lawrence W director 1600 SMITH ST. HQSEO HOUSTON TX 77002
Zimmerman James M director C/O FOSSIL GROUP, INC. 901 S. CENTRAL EXPRESSWAY RICHARDSON TX 75080
Cash James I director C/O WINSTAR COMMUNICATIONS INC 685 THIRD AVENUE NEW YORK NY 10017
Burke Sheila P director WELLPOINT, INC 120 MONUMENT CIRCLE INDIANAPOLIS IN 46240
Sidwell David H director MORGAN STANLEY 1585 BROADWAY NEW YORK NY 10036
Edwardson John A director P O BOX 66100-WHQLD CHICAGO IL 60666

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