Watsco (BSP:W1SO34) ROCE %

: 13.92% (As of Dec. 2023)

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ROCE % measures how well a company generates profits from its capital. It is calculated as EBIT divided by Capital Employed, where Capital Employed is calculated as Total Assets minus Total Current Liabilities. Watsco's annualized ROCE % for the quarter that ended in Dec. 2023 was 13.92%.

Watsco ROCE % Historical Data

The historical data trend for Watsco's ROCE % 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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Watsco Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROCE %

19.31

21.87

30.10

32.45

27.50

Watsco Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROCE %																21.00	24.19	34.27	32.88	13.92

Watsco ROCE % Calculation

Watsco's annualized ROCE % for the fiscal year that ended in Dec. 2023 is calculated as:

ROCE %	=	EBIT	/	( (Capital Employed	+	Capital Employed)	/ count )
		(A: Dec. 2023 )		(A: Dec. 2022 )		(A: Dec. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(A: Dec. 2023 )		(A: Dec. 2022 )		(A: Dec. 2023 )
	=	3894.41	/	( ( (18297.078 - 4755.07)	+	(18272.246 - 3488.716) )	/ 2 )
	=	3894.41	/	( (13542.008	+	14783.53)	/ 2 )
	=	3894.41	/	14162.769
	=	27.50 %

Watsco's ROCE % of for the quarter that ended in Dec. 2023 is calculated as:

ROCE %	=	EBIT ⁽¹⁾	/	( (Capital Employed	+	Capital Employed)	/ count )
		(Q: Dec. 2023 )		(Q: Sep. 2023 )		(Q: Dec. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(Q: Dec. 2023 )		(Q: Sep. 2023 )		(Q: Dec. 2023 )
	=	2111.776	/	( ( (19947.74 - 4383.728)	+	(18272.246 - 3488.716) )	/ 2 )
	=	2111.776	/	( ( 15564.012	+	14783.53 )	/ 2 )
	=	2111.776	/	15173.771
	=	13.92 %

(1) Note: The EBIT data used here is four times the quarterly (Dec. 2023) EBIT data.

Watsco (BSP:W1SO34) ROCE % Explanation

ROCE % can be especially useful when comparing the performance of capital-intensive companies. Unlike ROE %, which indicates the profitability of Shareholders Equity, ROCE % also considers long-term debt in Capital Employed. This can be helpful when analyzing companies with significant debt, as the result is neutralized by taking debt into consideration.

Generally speaking, a higher ROCE % indicates a stonger profitability for a company. Moreover, it is important to look at the ratio from a long term perspective. Investors tend to favor companies with stable and rising ROCE % trend over those with volatile ones.

Watsco ROCE % Related Terms

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Watsco (BSP:W1SO34) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Distribution » Watsco Inc (BSP:W1SO34) » Definitions » ROCE %

Comparable Companies

Traded in Other Exchanges

WSO.B:USA WSO:USA WC30:Germany

Address

2665 South Bayshore Drive, Suite 901, Miami, FL, USA, 33133

Website

https://www.watsco.com

Watsco is the largest heating, ventilation, air-conditioning, and refrigeration products distributor in North America. The company primarily operates in the United States (91% of 2022 revenue) with significant exposure in the Sunbelt states. Watsco also has operations in Canada (5% of sales) and Latin America and the Caribbean (4% of sales). The company's customer base consists of more than 120,000 dealers and contractors that serve the replacement and new construction HVACR markets for residential and light commercial applications.

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