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  (:) ROIC %: 0.00% (As of . 20)

Return on invested capital measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 's annualized return on invested capital (ROIC) for the quarter that ended in . 20 was 0.00%.

As of today, 's WACC % is %. 's return on invested capital is % (calculated using TTM income statement data). earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Historical Data

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

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Annual Data

ROIC %

Semi-Annual Data

ROIC %

Calculation

's annualized Return on Invested Capital (ROIC) for the fiscal year that ended in . 20 is calculated as:

Return on Invested Capital(A: . 20 )
=NOPAT/Average Invested Capital
=Operating Income*(1-Tax Rate)/( (Invested Capital (A: . 20 ) + Invested Capital (A: . 20 ))/2)
= * ( 1 - % )/( ( + )/2)
=/
= %

where

Invested Capital(A: . 20 )
=Book Value of Debt + Book Value of Equity - Cash
=Long-Term Debt & Capital Lease Obligation + Current Portion of Long-Term Debt + Minority Interest + Total Stockholders Equity - Cash
= + + + -
=

Invested Capital(A: . 20 )
=Book Value of Debt + Book Value of Equity - Cash
=Long-Term Debt & Capital Lease Obligation + Current Portion of Long-Term Debt + Minority Interest + Total Stockholders Equity - Cash
= + + + -
=

's annualized Return on Invested Capital (ROIC) for the quarter that ended in . 20 is calculated as:

Return on Invested Capital(Q: . 20 )
=NOPAT/Average Invested Capital
=Operating Income*(1-Tax Rate)/( (Invested Capital (Q: . 20 ) + Invested Capital (Q: . 20 ))/2)
= * ( 1 - % )/( ( + )/2)
=/
= %

where

Invested Capital(Q: . 20 )
=Book Value of Debt + Book Value of Equity - Cash
=Long-Term Debt & Capital Lease Obligation + Current Portion of Long-Term Debt + Minority Interest + Total Stockholders Equity - Cash
= + + + -
=

Invested Capital(Q: {Q1})
=Book Value of Debt + Book Value of Equity - Cash
=Long-Term Debt & Capital Lease Obligation + Current Portion of Long-Term Debt + Minority Interest + Total Stockholders Equity - Cash
= + + + -
=

Note: The Operating Income data used here is one times the annual (. 20) data.

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


Explanation

Return on Invested Capital 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 Return on Capital 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, 's WACC % is %. 's return on invested capital is % (calculated using TTM income statement data).


Be Aware

Like ROE and ROA, ROC 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.


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