Corning Natural Gas Holding (Corning Natural Gas Holding) ROIC % : 8.23% (As of Mar. 2022)

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What is Corning Natural Gas Holding 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 %. Corning Natural Gas Holding's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2022 was 8.23%.

As of today (2024-04-27), Corning Natural Gas Holding's WACC % is 4.44%. Corning Natural Gas Holding's ROIC % is 2.96% (calculated using TTM income statement data). Corning Natural Gas Holding earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Corning Natural Gas Holding ROIC % Historical Data

The historical data trend for Corning Natural Gas Holding'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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Corning Natural Gas Holding ROIC % Chart

Corning Natural Gas Holding Annual Data

Trend

Sep12

Sep13

Sep14

Sep15

Sep16

Sep17

Sep18

Sep19

Sep20

Sep21

ROIC %

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3.09

3.36

4.42

4.19

2.25

Corning Natural Gas Holding Quarterly Data
	Jun17	Sep17	Dec17	Mar18	Jun18	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22
ROIC %	Get a 7-Day Free Trial															7.61	0.71	-1.18	2.87	8.23

Competitive Comparison of Corning Natural Gas Holding's ROIC %

For the Utilities - Regulated Gas subindustry, Corning Natural Gas Holding'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.

Corning Natural Gas Holding's ROIC % Distribution in the Utilities - Regulated Industry

For the Utilities - Regulated industry and Utilities sector, Corning Natural Gas Holding's ROIC % distribution charts can be found below:

* The bar in red indicates where Corning Natural Gas Holding's ROIC % falls into.

Corning Natural Gas Holding ROIC % Calculation

Corning Natural Gas Holding's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Sep. 2021 is calculated as:

	ROIC % (A: Sep. 2021 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Sep. 2020 )	+	Invested Capital (A: Sep. 2021 ))	/ count )
=	4.359 * ( 1 - 23.33% )	/	( (142.814	+	154.766)	/ 2 )
=	3.3420453	/	148.79
=	2.25 %

where

	Invested Capital		(A: Sep. 2020 )
=	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	))
=	136.459	-	3.163	-	( 0.412	-	max(0, 18.75	-	9.232	+	0.412	))
=	142.814

	Invested Capital		(A: Sep. 2021 )
=	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	))
=	144.055	-	4.646	-	( 0.334	-	max(0, 25.639	-	10.282	+	0.334	))
=	154.766

Corning Natural Gas Holding's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Mar. 2022 is calculated as:

	ROIC % (Q: Mar. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2021 )	+	Invested Capital (Q: Mar. 2022 ))	/ count )
=	16.732 * ( 1 - 22.22% )	/	( (155.766	+	160.625)	/ 2 )
=	13.0141496	/	158.1955
=	8.23 %

where

	Invested Capital		(Q: Dec. 2021 )
=	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	))
=	148.09	-	5.83	-	( 0.206	-	max(0, 25.541	-	12.035	+	0.206	))
=	155.766

	Invested Capital		(Q: Mar. 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	))
=	152.913	-	6.889	-	( 0.333	-	max(0, 29.751	-	15.15	+	0.333	))
=	160.625

Note: The Operating Income data used here is four times the quarterly (Mar. 2022) data.

Corning Natural Gas Holding (OTCPK:CNIGO.PFD) 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, Corning Natural Gas Holding's WACC % is 4.44%. Corning Natural Gas Holding's ROIC % is 2.96% (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.

Corning Natural Gas Holding ROIC % Related Terms

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Corning Natural Gas Holding (Corning Natural Gas Holding) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Utilities » Utilities - Regulated » Corning Natural Gas Holding Corp (OTCPK:CNIGO.PFD) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

330 West William Street, Corning, NY, USA, 14830

Website

http://www.corninggas.com

Corning Natural Gas Holding Corp, through its subsidiaries, is engaged in natural gas and electric distribution. Its segments include Gas Company, Pike, Leatherstocking companies, and Holding company. The company serves residential, commercial, industrial, and municipal customers. The company generates the vast majority of its revenue from Gas distribution.