Alliance Fiber Optic Products (Alliance Fiber Optic Products) ROIC % : -6.22% (As of Mar. 2016)

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What is Alliance Fiber Optic Products ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Alliance Fiber Optic Products's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2016 was -6.22%.

As of today (2024-05-14), Alliance Fiber Optic Products's WACC % is 0.00%. Alliance Fiber Optic Products's ROIC % is 0.00% (calculated using TTM income statement data). Alliance Fiber Optic Products earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Alliance Fiber Optic Products ROIC % Historical Data

The historical data trend for Alliance Fiber Optic Products'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.

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Alliance Fiber Optic Products ROIC % Chart

Alliance Fiber Optic Products Annual Data

Trend

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

Dec15

ROIC %

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20.19

32.49

56.87

40.58

33.22

Alliance Fiber Optic Products Quarterly Data
	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15	Dec15	Mar16
ROIC %	Get a 7-Day Free Trial															39.80	54.69	37.37	7.50	-6.22

Competitive Comparison of Alliance Fiber Optic Products's ROIC %

For the Electronic Components subindustry, Alliance Fiber Optic Products'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.

Alliance Fiber Optic Products's ROIC % Distribution in the Hardware Industry

For the Hardware industry and Technology sector, Alliance Fiber Optic Products's ROIC % distribution charts can be found below:

* The bar in red indicates where Alliance Fiber Optic Products's ROIC % falls into.

Alliance Fiber Optic Products ROIC % Calculation

Alliance Fiber Optic Products's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2015 is calculated as:

	ROIC % (A: Dec. 2015 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2014 )	+	Invested Capital (A: Dec. 2015 ))	/ count )
=	19.194 * ( 1 - 34.21% )	/	( (33.387	+	42.638)	/ 2 )
=	12.6277326	/	38.0125
=	33.22 %

where

	Invested Capital		(A: Dec. 2014 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	105.173	-	17.206	-	( 54.58	-	max(0, 17.935	-	80.458	+	54.58	))
=	33.387

	Invested Capital		(A: Dec. 2015 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	80.633	-	14.007	-	( 23.988	-	max(0, 15.569	-	53.423	+	23.988	))
=	42.638

Alliance Fiber Optic Products's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Mar. 2016 is calculated as:

	ROIC % (Q: Mar. 2016 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2015 )	+	Invested Capital (Q: Mar. 2016 ))	/ count )
=	-2.596 * ( 1 - 2.01% )	/	( (42.638	+	39.169)	/ 2 )
=	-2.5438204	/	40.9035
=	-6.22 %

where

	Invested Capital		(Q: Dec. 2015 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	80.633	-	14.007	-	( 23.988	-	max(0, 15.569	-	53.423	+	23.988	))
=	42.638

	Invested Capital		(Q: Mar. 2016 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	79.743	-	14.363	-	( 26.211	-	max(0, 14.363	-	52.635	+	26.211	))
=	39.169

Note: The Operating Income data used here is four times the quarterly (Mar. 2016) data.

Alliance Fiber Optic Products (NAS:AFOP) 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, Alliance Fiber Optic Products's WACC % is 0.00%. Alliance Fiber Optic Products's ROIC % is 0.00% (calculated using TTM income statement data).

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.

Alliance Fiber Optic Products ROIC % Related Terms

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Alliance Fiber Optic Products (Alliance Fiber Optic Products) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Hardware » Alliance Fiber Optic Products Inc (NAS:AFOP) » Definitions » ROIC %

Traded in Other Exchanges

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Address

Website

http://www.afop.com

Alliance Fiber Optic Products Inc was incorporated in California on December 12, 1995. The Company designs, manufactures and markets fiber optic components and integrated modules incorporating these components, for communications equipment manufacturers and service providers. The Company products including interconnect devices that are used to connect optical fibers and components, couplers and splitters that are used to divide and combine optical power, and dense wavelength division multiplexing, or DWDM, devices that separate and combine multiple specific wavelengths. Its lines of optical products support the needs of current and next generation optical network systems applications. Its connectivity product family provides a comprehensive line of optical interconnect devices, couplers and splitters, PLC (planar lightwave circuits) and related optical products, as well as customized integrated modules incorporating these devices. Its optical passive products include WDM, CWDM and DWDM components and modules that utilize thin film filter technologies to separate optical signals, variable attenuators, optical switches and other optical devices utilizing micro optic lensing technology including integrated electro-optical modules incorporating these products. It sells its products to communications equipment manufacturers in the United States and also maintain a sales support staff in Taiwan to service customers based in the Asia Pacific region. The Companys main competitors in the components market include JDS Uniphase Corp., Oclaro Inc., Oplink Communications, Inc., Senko Advanced Components and TE Connectivity.

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