BOS Better Online Solutions (BOS Better Online Solutions) ROIC % : 7.47% (As of Dec. 2023)

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What is BOS Better Online Solutions 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 %. BOS Better Online Solutions's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 7.47%.

As of today (2024-04-28), BOS Better Online Solutions's WACC % is 11.31%. BOS Better Online Solutions's ROIC % is 11.87% (calculated using TTM income statement data). BOS Better Online Solutions 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.

BOS Better Online Solutions ROIC % Historical Data

The historical data trend for BOS Better Online Solutions'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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BOS Better Online Solutions ROIC % Chart

BOS Better Online Solutions Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

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2.09

2.33

3.56

10.68

12.28

BOS Better Online Solutions Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROIC %	Get a 7-Day Free Trial															14.03	18.23	13.72	8.20	7.47

Competitive Comparison of BOS Better Online Solutions's ROIC %

For the Communication Equipment subindustry, BOS Better Online Solutions'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.

BOS Better Online Solutions's ROIC % Distribution in the Hardware Industry

For the Hardware industry and Technology sector, BOS Better Online Solutions's ROIC % distribution charts can be found below:

* The bar in red indicates where BOS Better Online Solutions's ROIC % falls into.

BOS Better Online Solutions ROIC % Calculation

BOS Better Online Solutions's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROIC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	2.45 * ( 1 - 0.2% )	/	( (19.362	+	20.448)	/ 2 )
=	2.4451	/	19.905
=	12.28 %

where

	Invested Capital		(A: Dec. 2022 )
=	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	))
=	30.595	-	9.47	-	( 1.763	-	max(0, 11.195	-	20.574	+	1.763	))
=	19.362

	Invested Capital		(A: Dec. 2023 )
=	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	))
=	32.481	-	9.689	-	( 2.344	-	max(0, 10.904	-	22.018	+	2.344	))
=	20.448

BOS Better Online Solutions's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROIC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	1.6 * ( 1 - 0.93% )	/	( (22.003	+	20.448)	/ 2 )
=	1.58512	/	21.2255
=	7.47 %

where

	Invested Capital		(Q: Sep. 2023 )
=	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	))
=	31.676	-	8.496	-	( 1.177	-	max(0, 10.762	-	20.996	+	1.177	))
=	22.003

	Invested Capital		(Q: Dec. 2023 )
=	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	))
=	32.481	-	9.689	-	( 2.344	-	max(0, 10.904	-	22.018	+	2.344	))
=	20.448

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

BOS Better Online Solutions (NAS:BOSC) 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, BOS Better Online Solutions's WACC % is 11.31%. BOS Better Online Solutions's ROIC % is 11.87% (calculated using TTM income statement data). BOS Better Online Solutions 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. BOS Better Online Solutions 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.

BOS Better Online Solutions ROIC % Related Terms

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BOS Better Online Solutions (BOS Better Online Solutions) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Hardware » BOS Better Online Solutions Ltd (NAS:BOSC) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

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Address

20 Freiman Street, Rishon LeZion, ISR, 7535825

Website

https://www.boscom.com

BOS Better Online Solutions Ltd is a provider of Intelligent Robotics and Supply Chain solutions for enterprises. The company manages its business in three reportable divisions: the Intelligent Robotics segment, the RFID Division segment, and the Supply Chain Solutions segment. The majority of revenue derives from Supply Chain Solutions which distributes electro-mechanical components, mainly to customers in the aerospace, defense, and other industries, and is a supply chain service provider for aviation customers that seek a comprehensive solution to their components-supply needs. Geographically company derives the majority of its revenue from Israel.