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Chesapeake Energy ROIC %

: 32.60% (As of Jun. 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 %. Chesapeake Energy's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2022 was 32.60%.

As of today (2022-08-14), Chesapeake Energy's WACC % is 6.81%. Chesapeake Energy's ROIC % is -0.72% (calculated using TTM income statement data). Chesapeake Energy earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Chesapeake Energy ROIC % Historical Data

The historical data trend for Chesapeake Energy'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.

Chesapeake Energy Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
ROIC %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.59 6.51 -0.17 -1.26 -

Chesapeake Energy Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
ROIC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -24.49 -18.05 - -31.08 32.60

Competitive Comparison

For the Oil & Gas E&P subindustry, Chesapeake Energy'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.

   

Chesapeake Energy ROIC % Distribution

For the Oil & Gas industry and Energy sector, Chesapeake Energy's ROIC % distribution charts can be found below:

* The bar in red indicates where Chesapeake Energy's ROIC % falls into.



Chesapeake Energy ROIC % Calculation

Chesapeake Energy'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 )
=0 * ( 1 - 0% )/( (8028 + 10666)/ 2 )
=0/9347
=0.00 %

where

Chesapeake Energy'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 )
=5280 * ( 1 - 5.86% )/( (15383 + 15116)/ 2 )
=4970.592/15249.5
=32.60 %

where

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.


Chesapeake Energy  (NAS:CHK) 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, Chesapeake Energy's WACC % is 6.81%. Chesapeake Energy's ROIC % is -0.72% (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.


Chesapeake Energy ROIC % Related Terms

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Chesapeake Energy Business Description

Chesapeake Energy logo
Address
6100 North Western Avenue, Oklahoma City, OK, USA, 73118
Chesapeake Energy Corp is a US-based exploration and production company. It is engaged in the acquisition, exploration, and development of properties for the production of oil, natural gas, and natural gas liquids from underground reservoirs. Geographically, the company focuses its exploration, development, acquisition, and production efforts in the operating areas of Marcellus, Northern Appalachian Basin in Pennsylvania; Haynesville, Northwestern Louisiana (Gulf Coast); Eagle Ford, South Texas; Powder River Basin, Stacked pay in Wyoming; and Brazos Valley - Southeast Texas.
Executives
Bx Vine Ml Holdco Gp L.l.c. 10 percent owner 345 PARK AVENUE NEW YORK NY 10154
Bx Vine Ml Holdco L.p. 10 percent owner 345 PARK AVENUE NEW YORK NY 10154
Bx Vine Intermediate Holdco L.p. 10 percent owner 345 PARK AVENUE NEW YORK NY 10154
Brookfield Us Inc. 10 percent owner BROOKFIELD PLACE 250 VESEY STREET, 15TH FLOOR NEW YORK NY 10281-1023
Bam Partners Trust 10 percent owner 181 BAY STREET SUITE 300 TORONTO A6 M5J 2T3
Ocm Xi Chk Holdings, Llc 10 percent owner 333 S. GRAND AVE. 28TH FLOOR LOS ANGELES CA 90071
Ocm Xb Chk Holdings, Llc 10 percent owner 333 S. GRAND AVE. 28TH FLOOR LOS ANGELES CA 90071
Brookfield Public Securities Group Holdings Llc 10 percent owner 250 VESEY STREET 15TH FLOOR NEW YORK NY 10281
Larson Gregory M. officer: VP-Accounting & Controller 6100 N. WESTERN AVENUE OKLAHOMA CITY OK 73118
Viets Joshua J. officer: EVP & COO 6100 N. WESTERN AVENUE OKLAHOMA CITY OK 73118
Singh Mohit officer: EVP & CFO 6100 N. WESTERN AVENUE OKLAHOMA CITY OK 73118
Schwarzman Stephen A 10 percent owner C/O BLACKSTONE INC. 345 PARK AVE NEW YORK NY 10154
Blackstone Group Inc 10 percent owner 345 PARK AVENUE NEW YORK NY 10154
Blackstone Group Management L.l.c. 10 percent owner 345 PARK AVENUE NEW YORK NY 10154
Blackstone Holdings Iii L.p. 10 percent owner 345 PARK AVENUE NEW YORK NY 10154

Chesapeake Energy Headlines

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