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Archer-Daniels Midland Co (NYSE:ADM) ROIC %

: 6.59% (As of Sep. 2022)
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ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Archer-Daniels Midland Co's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2022 was 6.59%.

As of today (2022-11-30), Archer-Daniels Midland Co's WACC % is 6.20%. Archer-Daniels Midland Co's ROIC % is 6.94% (calculated using TTM income statement data). Archer-Daniels Midland Co 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.


Archer-Daniels Midland Co (NYSE:ADM) ROIC % Historical Data

The historical data trend for Archer-Daniels Midland Co's ROIC % 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.

Archer-Daniels Midland Co Annual Data
Trend Jun12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
ROIC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 4.60 5.25 4.02 4.14 5.48

Archer-Daniels Midland Co Quarterly Data
Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22
ROIC % 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 4.38 5.91 6.96 7.71 6.59

Archer-Daniels Midland Co (NYSE:ADM) ROIC % Competitive Comparison

For the Farm Products subindustry, Archer-Daniels Midland Co's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* 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. Note that "N/A" values will not show up in the chart.

   

Archer-Daniels Midland Co (NYSE:ADM) ROIC % Distribution

For the Consumer Packaged Goods industry and Consumer Defensive sector, Archer-Daniels Midland Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Archer-Daniels Midland Co's ROIC % falls into.



Archer-Daniels Midland Co ROIC % Calculation

Archer-Daniels Midland Co's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2021 is calculated as:

ROIC % (A: Dec. 2021 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2020 ) + Invested Capital (A: Dec. 2021 ))/ count )
=2993 * ( 1 - 17.45% )/( (43242 + 46991)/ 2 )
=2470.7215/45116.5
=5.48 %

where

Archer-Daniels Midland Co's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2022 is calculated as:

ROIC % (Q: Sep. 2022 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jun. 2022 ) + Invested Capital (Q: Sep. 2022 ))/ count )
=3972 * ( 1 - 15.69% )/( (53149 + 48549)/ 2 )
=3348.7932/50849
=6.59 %

where

Note: The Operating Income data used here is four times the quarterly (Sep. 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.


Archer-Daniels Midland Co  (NYSE:ADM) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 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 ROIC % 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, Archer-Daniels Midland Co's WACC % is 6.20%. Archer-Daniels Midland Co's ROIC % is 6.94% (calculated using TTM income statement data). Archer-Daniels Midland Co 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. Archer-Daniels Midland Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Be Aware

Like ROE % and ROA %, ROIC % 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.


Archer-Daniels Midland Co ROIC % Related Terms

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Archer-Daniels Midland Co (NYSE:ADM) Business Description

Archer-Daniels Midland Co logo
Address
77 West Wacker Drive, Suite 4600, Chicago, IL, USA, 60601
Archer Daniels Midland is a major processor of oilseeds, corn, wheat, and other agricultural commodities. Additionally, the company owns an extensive network of logistical assets to store and transport crops around the globe. ADM also runs a nutrition business that focuses on both human and animal ingredients.
Executives
Colbert Theodore Iii director C/O THE BOEING COMPANY 100 RIVERSIDE PLAZA CHICAGO IL 60606-1596
Strader Fruit Molly L officer: Vice Pres., Corp. Controller 77 WEST WACKER DRIVE SUITE 4600 CHICAGO IL 60601
Weber Jennifer L officer: Senior Vice President 1000 LOWES BOULEVARD MOORESVILLE NC 28117
Schlitz Lei Zhang director 155 HARLEM AVE. GLENVIEW IL 60025
Burke Michael S director C/O AECOM TECHNOLOGY CORPORATION 555 S. FLOWER STREET, SUITE 3700 LOS ANGELES CA 90071
Rettore Stefano officer: Senior Vice President 77 WEST WACKER DRIVE SUITE 4600 CHICAGO IL 60601
Harrison Suzan F. director 77 WEST WACKER DRIVE SUITE 4600 CHICAGO IL 60601
Sandler Debra A. director KEURIG DR PEPPER INC. 53 SOUTH AVE. BURLINGTON MA 01803
Macciocchi Vincent F officer: Senior Vice President 77 W. WACKER DR., SUITE 4600 CHICAGO IL 60601
Cuddy Christopher M officer: President-Corn 77 W. WACKER DR., SUITE 4600 CHICAGO IL 60601
Morris Gregory A officer: Senior Vice President 77 W. WACKER DR., SUITE 4600 CHICAGO IL 60601
Sanchez Francisco J director 77 W. WACKER DR., SUITE 4600 CHICAGO IL 60601
Bard Benjamin I officer: Vice President 4666 FARIES PARKWAY DECATUR IL 62526
Findlay D Cameron officer: Senior Vice President 77 W. WACKER DR., SUITE 2600 CHICAGO IL 60601
Shih Daniel director THE GATEWAY TOWER II, SUITE 3003 25 CANTON ROAD TSIMSHATSUI, KOWLOON K3 -

Archer-Daniels Midland Co (NYSE:ADM) Headlines

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