IDEX (NYSE:IEX) ROIC %

: 17.80% (As of Sep. 2022)

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ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. IDEX's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2022 was 17.80%.

As of today (2023-01-30), IDEX's WACC % is 7.40%. IDEX's ROIC % is 15.61% (calculated using TTM income statement data). IDEX 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.

IDEX ROIC % Historical Data

The historical data trend for IDEX'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.

* Premium members only.

IDEX Annual Data

Trend

Dec12

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

ROIC %

13.93

16.79

17.27

14.44

14.88

IDEX Quarterly Data
	Dec17	Mar18	Jun18	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22
ROIC %																13.70	13.74	15.43	15.10	17.80

Competitive Comparison

For the Specialty Industrial Machinery subindustry, IDEX'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.

Annual Data Quarterly Data

IDEX ROIC % Distribution

For the Industrial Products industry and Industrials sector, IDEX's ROIC % distribution charts can be found below:

* The bar in red indicates where IDEX's ROIC % falls in comparison to its industry or sector. The grey bar indicates the ROIC %'s extreme value range as defined by GuruFocus.

IDEX ROIC % Calculation

IDEX's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2021 is calculated as:

	ROIC % (A: Dec. 2021 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2020 )	+	Invested Capital (A: Dec. 2021 ))	/ count )
=	646.3 * ( 1 - 22.51% )	/	( (3053.5	+	3676.9)	/ 2 )
=	500.81787	/	3365.2
=	14.88 %

where

	Invested Capital		(A: Dec. 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	))
=	4414.4	-	335	-	( 1025.9	-	max(0, 399	-	1657.2	+	1025.9	))
=	3053.5

	Invested Capital		(A: 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	))
=	4917.2	-	384.9	-	( 855.4	-	max(0, 480	-	1678	+	855.4	))
=	3676.9

IDEX's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2022 is calculated as:

	ROIC % (Q: Sep. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2022 )	+	Invested Capital (Q: Sep. 2022 ))	/ count )
=	879.6 * ( 1 - 21.76% )	/	( (3935.9	+	3794.8)	/ 2 )
=	688.19904	/	3865.35
=	17.80 %

where

	Invested Capital		(Q: Jun. 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	))
=	4912.8	-	419.1	-	( 557.8	-	max(0, 513.8	-	1551.3	+	557.8	))
=	3935.9

	Invested Capital		(Q: Sep. 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	))
=	4892.6	-	417.1	-	( 680.7	-	max(0, 506.5	-	1635	+	680.7	))
=	3794.8

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

IDEX (NYSE:IEX) 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, IDEX's WACC % is 7.40%. IDEX's ROIC % is 15.61% (calculated using TTM income statement data). IDEX 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. IDEX 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.

IDEX ROIC % Related Terms

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IDEX (NYSE:IEX) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » IDEX Corp (NYSE:IEX) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

IEX:Mexico ID7:Germany ID7:Germany I1EX34:Brazil

Address

3100 Sanders Road, Suite 301, Northbrook, IL, USA, 60062

Website

https://www.idexcorp.com

Idex manufactures pumps, flow meters, valves, and fluidic systems for customers in a variety of end markets, including industrial, fire & safety, life science, and water. The firm's business is organized into three segments: fluid & metering technologies, health & science technologies, and fire & safety and diversified products. Based in Lake Forest, Illinois, Idex has manufacturing operations in over 20 countries and has over 7,000 employees. The company generated $2.8 billion in revenue and $661 million in adjusted operating income in 2021.

Executives

Watts Stanfield Paris	director	3100 SANDERS ROAD SUITE 301 NORTHBROOK IL 60062
Gunter Lakecia N	director	3100 SANDER ROAD SUITE 301 NORTHBROOK IL 60062
Satterthwaite Livingston	director	1925 WEST FIELD COURT SUITE 200 LAKE FOREST IL 60045
Parry David C	director	155 HARLEM AVE. GLENVIEW IL 60025
Beck Mark A	director	2200 PENNSYLVANIA AVENUE, NW SUITE 800W WASHINGTON DC 20037
Christenson Carl R	director	C/O ALTRA INDUSTRIAL MOTION INC. 300 GRANITE STREET BRAINTREE MA 02184
Helmkamp Katrina L	director	1925 WEST FIELD COURT SUITE 200 LAKE FOREST IL 60045
Cook William M	director	1925 WEST FIELD COURT SUITE 200 LAKE FOREST IL 60045
Buthman Mark A	director	P O BOX 619100 DALLAS TX 752619100
Unnikrishnan Roopa	officer: SVP, Strategy&Corp Development	3100 SANDERS ROAD SUITE 301 NORTHBROOK IL 60062
Anderson Lisa M	officer: SVP, General Counsel &Corp Sec	3100 SANDERS ROAD SUITE 301 NORTHBROOK IL 60062
Lausas Allison S	officer: VP, Chief Accounting Officer	C/O SUNCOKE ENERGY, INC. 1011 WARRENVILLE ROAD, SUITE 600 LISLE IL 60532
Flores Melissa S	officer: SVP-Chief HR Officer	3100 SANDER ROAD SUITE 301 NORTHBROOK IL 60062
Warner Cynthia J	director	1925 WEST FIELD COURT SUITE 200 LAKE FOREST IL 60045
Mrozek Ernest J	director	SERVICE MASTER 2300 WARRENVILLE ROAD DOWNERS GROVE IL 60515