ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Pepkor Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2023 was 8.87%.
As of today (2024-04-27), Pepkor Holdings's WACC % is 14.32%. Pepkor Holdings's ROIC % is 104.45% (calculated using TTM income statement data).
Pepkor Holdings 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.
Pepkor Holdings ROIC % Historical Data
The historical data trend for Pepkor Holdings'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.
Competitive Comparison of Pepkor Holdings's ROIC %
For the Department Stores subindustry, Pepkor Holdings'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.
Pepkor Holdings's ROIC % Distribution in the Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, Pepkor Holdings's ROIC % distribution charts can be found below:
* The bar in red indicates where Pepkor Holdings's ROIC % falls into.
Pepkor Holdings ROIC % Calculation
Pepkor Holdings's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Sep. 2023 is calculated as:
Note:
The Operating Income data used here is two times the semi-annual (Sep. 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.
Pepkor Holdings (JSE:PPH) 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, Pepkor Holdings's WACC % is 14.32%. Pepkor Holdings's ROIC % is 104.45% (calculated using TTM income statement data).
Pepkor Holdings 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.
Pepkor Holdings 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.
Pepkor Holdings ROIC % Related Terms
Thank you for viewing the detailed overview of Pepkor Holdings's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Pepkor Holdings Ltd is an operator of a chain of retail stores based in Parow East, South Africa. The company functions offer segments that include clothing and general merchandise, furniture, appliances and electronics, building materials and fintech, it generates the vast majority of its revenue from the clothing and general merchandise segment, which consists of clothing, footwear and homeware products, fast-moving consumer specialty goods, cellular and financial services, thereby enabling its customers to get easy access to everyday products and services at adorable prices. Geographically, it generates majority of its revenue from South Africa and also operates in other countries.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
JSE:PPH has been successfully added to your 