ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. El Pollo Loco Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 4.04%.
As of today (2024-04-28), El Pollo Loco Holdings's WACC % is 5.68%. El Pollo Loco Holdings's ROIC % is 4.50% (calculated using TTM income statement data).
El Pollo Loco Holdings 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 El Pollo Loco Holdings's ROIC %
For the Restaurants subindustry, El Pollo Loco 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.
El Pollo Loco Holdings's ROIC % Distribution in the Restaurants Industry
For the Restaurants industry and Consumer Cyclical sector, El Pollo Loco Holdings's ROIC % distribution charts can be found below:
* The bar in red indicates where El Pollo Loco Holdings's ROIC % falls into.
El Pollo Loco Holdings ROIC % Calculation
El Pollo Loco Holdings'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.
El Pollo Loco Holdings (NAS:LOCO) 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, El Pollo Loco Holdings's WACC % is 5.68%. El Pollo Loco Holdings's ROIC % is 4.50% (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.
El Pollo Loco Holdings ROIC % Related Terms
Thank you for viewing the detailed overview of El Pollo Loco Holdings's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
El Pollo Loco Holdings (El Pollo Loco Holdings) Business Description
El Pollo Loco Holdings Inc operates and franchises hundreds of fast-casual chicken restaurants in the United States. Restaurant locations are typically free-standing and include drive-thrus, and menus include many low-priced options. Poultry is the company's largest food cost, accounting for roughly 38% of total food and paper cost, and the company manages that commodity price risk by using multiple suppliers and entering supply contracts of varying lengths depending on market conditions.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
LOCO has been successfully added to your 