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Lamb Weston Holdings ROC (Joel Greenblatt) %

: 29.01% (As of Feb. 2020)
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Joel Greenblatt defined Return on Capital differently in his book The Little Book That Still Beats the Market (Little Books. Big Profits). He defines ROC (Joel Greenblatt) % as EBIT divided by the total of Property, Plant and Equipment and net working capital. Lamb Weston Holdings's annualized ROC (Joel Greenblatt) % for the quarter that ended in Feb. 2020 was 29.01%.

NYSE:LW' s ROC (Joel Greenblatt) % Range Over the Past 10 Years
Min: 26.75   Med: 34.1   Max: 34.64
Current: 31.43

26.75
34.64

During the past 6 years, Lamb Weston Holdings's highest ROC (Joel Greenblatt) % was 34.64%. The lowest was 26.75%. And the median was 34.10%.

NYSE:LW's ROC (Joel Greenblatt) % is ranked higher than
84% of the 1664 Companies
in the Consumer Packaged Goods industry.

( Industry Median: 10.16 vs. NYSE:LW: 31.43 )

Lamb Weston Holdings's 5-Year average Growth Rate of ROC (Joel Greenblatt) % was 0.00% per year.


Lamb Weston Holdings ROC (Joel Greenblatt) % Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Lamb Weston Holdings Annual Data
May14 May15 May16 May17 May18 May19
ROC (Joel Greenblatt) % Premium Member Only 27.72 26.75 34.64 34.10 34.58

Lamb Weston Holdings Quarterly Data
May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17 Nov17 Feb18 May18 Aug18 Nov18 Feb19 May19 Aug19 Nov19 Feb20
ROC (Joel Greenblatt) % 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 39.08 28.75 32.66 35.82 29.01

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Lamb Weston Holdings ROC (Joel Greenblatt) % Distribution

* The bar in red indicates where Lamb Weston Holdings's ROC (Joel Greenblatt) % falls into.



Lamb Weston Holdings ROC (Joel Greenblatt) % Calculation

Joel Greenblatt defined Return on Capital differently in his book The Little Book That Still Beats the Market (Little Books. Big Profits) . He defines Return on Capital as follows:

ROC (Joel Greenblatt) %=EBIT/Average of (Net fixed Assets + Net Working Capital)

EBIT stands for Earnings Before Interest and Taxes.

Fixed Assets are also known as non-current assets. They include the Property, Plant and Equipment that the firm needs in its operation.

GuruFocus calculates net working capital as: (Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Deferred Revenue + Other Current Liabilities). We're trying to account for OPERATING assets and liabilities (part of daily business) when calculating working capital. Cash and marketable securities are considered NON-OPERATING assets and are not included in calculation. We will also back out all interest bearing debt, short term debt and the portion of long term debt that is due in the current period from the current liabilities. This debt will be considered when computing cost of capital and it would be inappropriate to count it twice.

Working Capital(Q: Nov. 2019 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(399.7 + 636 + 47.8) - (531.6 + 0 + 68.3)
=483.6

Working Capital(Q: Feb. 2020 )
=(Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Defer. Rev. + Other Current Liabilities)
=(368.8 + 597.3 + 101.3) - (436 + 0 + 75.8)
=555.6

When net working capital is negative, 0 is used.

So ROC (Joel Greenblatt) % of Lamb Weston Holdings for the quarter that ended in Feb. 2020 can be restated as:

ROC (Joel Greenblatt) %(Q: Feb. 2020 )
=EBIT/Average of (Net fixed Assets + Net Working Capital)
=EBIT/Average of (Property, Plant and Equipment+Net Working Capital)
     Q: Nov. 2019  Q: Feb. 2020
=EBIT/( ( (Property, Plant and Equipment + Net Working Capital) + (Property, Plant and Equipment + Net Working Capital) )/ count )
=650/( ( (1715.2 + max(483.6, 0)) + (1726.4 + max(555.6, 0)) )/ 2 )
=650/( ( 2198.8 + 2282 )/ 2 )
=650/2240.4
=29.01 %

Note: The EBIT data used here is four times the quarterly (Feb. 2020) EBIT data.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Lamb Weston Holdings  (NYSE:LW) ROC (Joel Greenblatt) % Explanation

The way Joel Greenblatt defines Return on Capital is a more accurate measure of how efficiently the company generates returns onthe capital actually invested in the business. EBIT is used instead of net income because the tax and interest payment may be affected by factors other than the core business operation. Intangible assets are not included in the calculation because they don't need to be replaced.

Joel Greenblatt uses his definition of Return on Capital and Earnings Yield (Joel Greenblatt) % to rank companies.


Lamb Weston Holdings ROC (Joel Greenblatt) % Related Terms


Lamb Weston Holdings ROC (Joel Greenblatt) % Headlines

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