ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Hugoton Royalty Trust's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 0.00%.
As of today (2024-04-25), Hugoton Royalty Trust's WACC % is -1.08%. Hugoton Royalty Trust's ROIC % is 0.00% (calculated using TTM income statement data).
Hugoton Royalty Trust 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.
* 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 Hugoton Royalty Trust's ROIC %
For the Oil & Gas E&P subindustry, Hugoton Royalty Trust'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.
Hugoton Royalty Trust's ROIC % Distribution in the Oil & Gas Industry
For the Oil & Gas industry and Energy sector, Hugoton Royalty Trust's ROIC % distribution charts can be found below:
* The bar in red indicates where Hugoton Royalty Trust's ROIC % falls into.
Hugoton Royalty Trust ROIC % Calculation
Hugoton Royalty Trust's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:
Note:
The Operating Income data used here is four times the quarterly (Dec. 2023) 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.
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, Hugoton Royalty Trust's WACC % is -1.08%. Hugoton Royalty Trust's ROIC % is 0.00% (calculated using TTM income statement data).
Hugoton Royalty Trust 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.
Hugoton Royalty Trust 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.
Hugoton Royalty Trust ROIC % Related Terms
Thank you for viewing the detailed overview of Hugoton Royalty Trust's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Hugoton Royalty Trust (Hugoton Royalty Trust) Business Description
Hugoton Royalty Trust holds net profits interests in oil and gas properties. The underlying properties of the trust include gas-producing properties in the Hugoton area of Oklahoma and Kansas, the Anadarko Basin of Oklahoma, and the Green River Basin of Wyoming. The net profit interests entitle the trust to receive majority of the net proceeds from the sale of oil and gas from the underlying properties.
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