Michelin (XPAR:ML) ROCE % : 8.42% (As of Dec. 2023)

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What is Michelin ROCE %?

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. Michelin's annualized ROCE % for the quarter that ended in Dec. 2023 was 8.42%.

Michelin ROCE % Historical Data

The historical data trend for Michelin'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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Michelin ROCE % Chart

Michelin Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROCE %

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11.04

5.15

10.87

11.56

10.70

Michelin Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROCE %	Get a 7-Day Free Trial															10.42	10.06	12.90	13.21	8.42

Michelin ROCE % Calculation

Michelin'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 )
	=	2877	/	( ( (35346 - 9038)	+	(35195 - 7744) )	/ 2 )
	=	2877	/	( (26308	+	27451)	/ 2 )
	=	2877	/	26879.5
	=	10.70 %

Michelin'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: Jun. 2023 )		(Q: Dec. 2023 )
	=	EBIT	/	( ( (Total Assets - Total Current Liabilities)	+	(Total Assets - Total Current Liabilities) )	/ count )
		(Q: Dec. 2023 )		(Q: Jun. 2023 )		(Q: Dec. 2023 )
	=	2270	/	( ( (35452 - 9006)	+	(35195 - 7744) )	/ 2 )
	=	2270	/	( ( 26446	+	27451 )	/ 2 )
	=	2270	/	26948.5
	=	8.42 %

(1) Note: The EBIT data used here is two times the semi-annual (Dec. 2023) EBIT data.

Michelin (XPAR:ML) 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.

Michelin ROCE % Related Terms

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Michelin (XPAR:ML) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Michelin (XPAR:ML) » Definitions » ROCE %

Comparable Companies

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MGDDY:USA MGDDF:USA MLp:UK 0OFM:UK MCHA:Germany

Address

23, Place des Carmes, Dechaux, Puy-de-Dome, Clermont-Ferrand, FRA, 63000

Website

https://www.michelin.com

Michelin manufactures tires for passenger vehicles. The company also makes tires for all types of commercial vehicles as well as bicycle, motorcycle, earthmover, aviation, and agricultural tires. Its operations are organized into three operating segments namely Automotive and related distribution; Road transportation and related distribution; Specialty businesses and related distribution. The company generates maximum revenue from Automotive and related distribution segment.