Market Cap : 63.16 B | Enterprise Value : 56.33 B | PE Ratio : 33.63 | PB Ratio : 3.46 |
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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 %. Activision Blizzard's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2022 was 8.76%.
As of today (2022-08-15), Activision Blizzard's WACC % is 5.17%. Activision Blizzard's ROIC % is 14.95% (calculated using TTM income statement data). Activision Blizzard 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.
The historical data trend for Activision Blizzard'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.
For the Electronic Gaming & Multimedia subindustry, Activision Blizzard'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.
For the Interactive Media industry and Communication Services sector, Activision Blizzard's ROIC % distribution charts can be found below:
* The bar in red indicates where Activision Blizzard's ROIC % falls into.
Activision Blizzard'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 ) |
= | 3336 * ( 1 - 14.7% ) | / | ( (14233 | + | 13618) | / 2 ) |
= | 2845.608 | / | 13925.5 | |||
= | 20.43 % |
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 | )) |
= | 23109 | - | 1411 | - | ( 8647 | - | max(0, 3100 | - | 10565 | + | 8647 | )) |
= | 14233 |
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 | )) |
= | 25056 | - | 1293 | - | ( 10423 | - | max(0, 2411 | - | 12556 | + | 10423 | )) |
= | 13618 |
Activision Blizzard's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2022 is calculated as:
ROIC % (Q: Jun. 2022 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Mar. 2022 ) | + | Invested Capital (Q: Jun. 2022 )) | / count ) |
= | 1340 * ( 1 - 12.77% ) | / | ( (13361 | + | 13334) | / 2 ) |
= | 1168.882 | / | 13347.5 | |||
= | 8.76 % |
where
Invested Capital | (Q: Mar. 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 | )) |
= | 25012 | - | 1456 | - | ( 10967 | - | max(0, 2291 | - | 12486 | + | 10967 | )) |
= | 13361 |
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 | )) |
= | 24994 | - | 1177 | - | ( 10483 | - | max(0, 2024 | - | 12507 | + | 10483 | )) |
= | 13334 |
Note: The Operating Income data used here is four times the quarterly (Jun. 2022) 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, Activision Blizzard's WACC % is 5.17%. Activision Blizzard's ROIC % is 14.95% (calculated using TTM income statement data). Activision Blizzard 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. Activision Blizzard earns returns that do not match up to its cost of capital. It will destroy value as it grows.
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.
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Meservey Lulu Cheng | director | 2701 OLYMPIC BOULEVARD BUILDING B SANTA MONICA CA 90404 |
Bulatao Brian | officer: Chief Administrative Officer | C/O ACTIVISION BLIZZARD, INC. 3100 OCEAN PARK BOULEVARD SANTA MONICA CA 90405 |
Dixton Grant Michael | officer: Chief Legal Officer | C/O ACTIVISION BLIZZARD, INC. 3100 OCEAN PARK BOULEVARD SANTA MONICA CA 90405 |
Zerza Armin | officer: Chief Financial Officer | C/O ACTIVISION BLIZZARD, INC 3100 OCEAN PARK BOULEVARD SANTA MONICA CA 90405 |
Macartney Claudine | officer: Chief People Officer | AMERICAN INTERNATIONAL GROUP, INC. 175 WATER ST. NEW YORK NY 10038 |
Ostroff Dawn | director | 3100 OCEAN PARK BOULEVARD SANTA MONICA CA 91405 |
Yang Jesse | officer: Chief Accounting Officer | C/O ACTIVISION BLIZZARD, INC. 3100 OCEAN PARK BOULEVARD SANTA MONICA CA 90405 |
Alegre Daniel | officer: President and COO | 9800 59TH AVENUE NORTH MINNEAPOLIS MN 55317 |
Wereb Stephen G | officer: Principal Accounting Officer | C/O ACTIVISION, INC. 3100 OCEAN PARK BOULEVARD SANTA MONICA CA 90405 |
Walther Christopher B | officer: Chief Legal Officer | C/O ACTIVISION BLIZZARD 3100 OCEAN PARK BOULEVARD SANTA MONICA CA 90405 |
Bowers Reveta F | director | C/O ACTIVISION BLIZZARD, INC. 3100 OCEAN PARK BOULEVARD SANTA MONICA CA 90405 |
Johnson Collister | officer: President and COO | C/O ACTIVISION BLIZZARD, INC. 3100 OCEAN PARK BOULEVARD SANTA MONICA CA 90405 |
Neumann Spencer Adam | officer: Chief Financial Officer | SIERRA INCOME CORPORATION 375 PARK AVE., SUITE 3304 NEW YORK NY 10152 |
Asac Ii Lp | 10 percent owner | C/O CHADWICK & COMPANY 225 HIGHWAY 35, SUITE 102C RED BANK NJ 07701 |
Asac Ii Llc | 10 percent owner | C/O CHADWICK & COMPANY 225 HIGHWAY 35, SUITE 102C RED BANK NJ 07701 |
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