ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Keurig Green Mountain's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2015 was 12.93%.
As of today (2024-05-12), Keurig Green Mountain's WACC % is 0.00%. Keurig Green Mountain's ROIC % is 0.00% (calculated using TTM income statement data).
Keurig Green Mountain earns returns that do not match up to its cost of capital. It will destroy value as it grows.
* 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.
Competitive Comparison of Keurig Green Mountain's ROIC %
For the Packaged Foods subindustry, Keurig Green Mountain'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.
Keurig Green Mountain's ROIC % Distribution in the Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, Keurig Green Mountain's ROIC % distribution charts can be found below:
* The bar in red indicates where Keurig Green Mountain's ROIC % falls into.
Keurig Green Mountain ROIC % Calculation
Keurig Green Mountain's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Sep. 2015 is calculated as:
Note:
The Operating Income data used here is four times the quarterly (Dec. 2015) 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.
Keurig Green Mountain (NAS:GMCR) 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, Keurig Green Mountain's WACC % is 0.00%. Keurig Green Mountain'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.
Keurig Green Mountain ROIC % Related Terms
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Keurig Green Mountain (Keurig Green Mountain) Business Description
Keurig Green Mountain Inc is a Delaware Corporation formed in July 1993. The Company is engaged in the coffee and coffeemaker businesses in the United States and Canada. It sells Keurig Single Cup brewers and roast high-quality Arabica bean coffees including single-origin, Fair Trade Certified, certified organic, flavored, limited edition and proprietary blends offered in K-Cup and Vue packs for use with its Keurig Single Cup brewers. The Company also offers traditional whole bean and ground coffee in other package types including bags, fractional packages and cans. In addition, it produces and sells other specialty beverages in portion packs including hot apple cider, hot and iced teas, iced coffees, iced fruit brews, hot cocoa and other dairy-based beverages. The Company manages its operations through three business segments, the Specialty Coffee business unit (SCBU), the Keurig business unit (KBU) and the Canadian business unit (CBU). Due to this combination, the results of U.S. operations, formerly reported in the SCBU and KBU segments, are reported in the Domestic segment and the results of Canadian operations are in the "Canada" segment. The Domestic segment sells single cup brewers and accessories, and sources, produces and sells coffee, hot cocoa, teas and other beverages in portion packs and coffee in more traditional packaging including bags and fractional packs to retailers including supermarkets, department stores, mass merchandisers, club stores, and convenience stores; to restaurants, hospitality accounts, office coffee distributors, and partner brand owners; and to consumers through Company websites. The Canada segment sells single cup brewers, accessories, and sources, produces and sells coffee, teas and other beverages in portion packs and coffee in more traditional packaging including bags, cans and fractional packs under a variety of brands to retailers including supermarkets, department stores, mass merchandisers, club stores, through office coffee services to offices, convenience stores, restaurants, hospitality accounts, and to consumers through its website. The Company's competitors in the coffee marketplace include large national and international companies and numerous local and regional companies.
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