GURUFOCUS.COM » STOCK LIST » USA » NAS » DLocal Ltd (NAS:DLO) » Definitions » ROIC %
Switch to:

DLocal ROIC %

: 172.32% (As of Mar. 2022)
View and export this data going back to 2021. Start your Free Trial

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. DLocal's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2022 was 172.32%.

As of today (2022-08-14), DLocal's WACC % is 7.81%. DLocal's ROIC % is 148.44% (calculated using TTM income statement data). DLocal 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.


DLocal ROIC % Historical Data

The historical data trend for DLocal'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.

DLocal Annual Data
Trend Dec19 Dec20 Dec21
ROIC %
466.55 399.07 206.67

DLocal Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22
ROIC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 219.85 130.11 138.14 151.09 172.32

Competitive Comparison

For the Software - Infrastructure subindustry, DLocal'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.

   

DLocal ROIC % Distribution

For the Software industry and Technology sector, DLocal's ROIC % distribution charts can be found below:

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



DLocal ROIC % Calculation

DLocal'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 )
=83.871 * ( 1 - 8.94% )/( (10.104 + 63.805)/ 2 )
=76.3729326/36.9545
=206.67 %

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))
=200.467 - 150.652 - ( 52.003 - max(0, 155.143 - 194.854+52.003))
=10.104

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))
=583.008 - 290.286 - ( 228.917 - max(0, 298.398 - 529.506+228.917))
=63.805

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

ROIC % (Q: Mar. 2022 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Dec. 2021 ) + Invested Capital (Q: Mar. 2022 ))/ count )
=116.04 * ( 1 - 4.41% )/( (63.805 + 64.934)/ 2 )
=110.922636/64.3695
=172.32 %

where

Invested Capital(Q: 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))
=583.008 - 290.286 - ( 228.917 - max(0, 298.398 - 529.506+228.917))
=63.805

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))
=684.539 - 360.344 - ( 411.35 - max(0, 370.468 - 629.729+411.35))
=64.934

Note: The Operating Income data used here is four times the quarterly (Mar. 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.


DLocal  (NAS:DLO) 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, DLocal's WACC % is 7.81%. DLocal's ROIC % is 148.44% (calculated using TTM income statement data). DLocal 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. DLocal 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.


DLocal ROIC % Related Terms

Thank you for viewing the detailed overview of DLocal's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.


DLocal Business Description

DLocal logo
Traded in Other Exchanges
N/A
Address
Drive Luis Bonavita 1294, Montevideo, URY, 11300
DLocal Ltd is focused on making the complex simple, redefining the online payments experience in emerging markets. Through its technology platform One dLocal, the company enables global enterprise merchants to get paid (pay-in) and to make payments (pay-out) online in a safe and efficient manner. The company earns revenue from fees charged to merchants in connection with payment processing services for cross-border and local payment transactions.

DLocal Headlines

Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)