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TE Connectivity ROC %

: 15.53% (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 %. TE Connectivity's annualized return on capital (ROC %) for the quarter that ended in Jun. 2022 was 15.53%.

As of today (2022-10-04), TE Connectivity's WACC % is 7.85%. TE Connectivity's ROC % is 16.52% (calculated using TTM income statement data). TE Connectivity 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.


TE Connectivity ROC % Historical Data

The historical data trend for TE Connectivity'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.

TE Connectivity Annual Data
Trend Sep12 Sep13 Sep14 Sep15 Sep16 Sep17 Sep18 Sep19 Sep20 Sep21
ROC %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 12.18 17.94 14.01 -5.38 15.89

TE Connectivity 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 15.82 22.35 13.99 14.40 15.53

TE Connectivity ROC % Calculation

TE Connectivity's annualized Return on Capital (ROC %) for the fiscal year that ended in Sep. 2021 is calculated as:

ROC % (A: Sep. 2021 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Sep. 2020 ) + Invested Capital (A: Sep. 2021 ))/ count )
=2698 * ( 1 - 5.17% )/( (15693 + 16511)/ 2 )
=2558.5134/16102
=15.89 %

where

TE Connectivity'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
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Mar. 2022 ) + Invested Capital (Q: Jun. 2022 ))/ count )
=3024 * ( 1 - 16.38% )/( (16266 + 16292)/ 2 )
=2528.6688/16279
=15.53 %

where

Note: The Operating Income 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.


TE Connectivity  (NYSE:TEL) 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, TE Connectivity's WACC % is 7.85%. TE Connectivity's ROC % is 16.52% (calculated using TTM income statement data). TE Connectivity 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.


TE Connectivity ROC % Related Terms

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TE Connectivity Business Description

TE Connectivity logo
Traded in Other Exchanges
Address
Muhlenstrasse 26, Schaffhausen, CHE, CH-8200
TE Connectivity is the largest electrical connector supplier in the world, supplying interconnect and sensor solutions to the transportation, industrial, and communications markets. With operations in 150 countries and over 500,000 stock-keeping units, TE Connectivity has a broad portfolio that forms the electrical architecture of its end customers' cutting-edge innovations.
Executives
Lin Syaru Shirley director
Stucki Aaron Kyle officer: Pres. Communications Solutions 1050 WESTLAKES DRIVE BERWYN PA 19312
Dugle Lynn A director 4803 STONECROFT BOULEVARD CHANTILLY VA 20151
Willoughby Dawn C director 1221 BROADWAY OAKLAND CA 94612
Rock Kevin N officer: President, Industrial Solution 1050 WESTLAKES DRIVE BERWYN PA 19312
Kerko David M director C/O KKR 9 WEST 57TH STREET, 41ST FLOOR NEW YORK NY 10019
Kroeger Shadrak W officer: Pres., Communications Solution 1050 WESTLAKES DRIVE BERWYN PA 19312
Talwalkar Abhijit Y director ONE AMD PLACE PO BOX 3453 SUNNYVALE CA 94088
Mitts Heath A officer: EVP & Chief Financial Officer 1925 WEST FIELD COURT SUITE 200 LAKE FOREST IL 60045
Murphy Tim officer: SVP & CHRO 1050 WESTLAKES DRIVE BERWYN PA 19312
Trudeau Mark director COVIDIEN PLC 15 HAMPSHIRE STREET MANSFIELD MA 02048
Davidson Carol Anthony director
Wright Laura director 2702 LOVE FIELD DRIVE P.O. BOX 36611 DALLAS TX 75235-1611
Jenkins John S officer: EVP & General Counsel 1050 WESTLAKES DRIVE BERWYN PA 19312
Gambill Bradley Alan officer: SVP, Strategy & Business Dev. 1050 WESTLAKES DRIVE BERWYN PA 19312

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