Edap TMS (Edap TMS) ROIC % : -49.50% (As of Dec. 2023)

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What is Edap TMS ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Edap TMS's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was -49.50%.

As of today (2024-04-26), Edap TMS's WACC % is 2.63%. Edap TMS's ROIC % is -73.26% (calculated using TTM income statement data). Edap TMS earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Edap TMS ROIC % Historical Data

The historical data trend for Edap TMS'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.

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Edap TMS ROIC % Chart

Edap TMS Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

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6.75

1.74

-5.53

-23.87

-69.66

Edap TMS Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROIC %	Get a 7-Day Free Trial															-24.68	-102.89	-69.16	-79.82	-49.50

Competitive Comparison of Edap TMS's ROIC %

For the Medical Distribution subindustry, Edap TMS'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.

Edap TMS's ROIC % Distribution in the Medical Distribution Industry

For the Medical Distribution industry and Healthcare sector, Edap TMS's ROIC % distribution charts can be found below:

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

Edap TMS ROIC % Calculation

Edap TMS's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROIC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	-21.605 * ( 1 - -3.14% )	/	( (28.865	+	35.111)	/ 2 )
=	-22.283397	/	31.988
=	-69.66 %

where

	Invested Capital		(A: Dec. 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	))
=	107.122	-	11.376	-	( 66.881	-	max(0, 22.996	-	95.888	+	66.881	))
=	28.865

	Invested Capital		(A: Dec. 2023 )
=	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	))
=	99.834	-	17.317	-	( 47.406	-	max(0, 30.094	-	85.583	+	47.406	))
=	35.111

Edap TMS's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROIC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-15.18 * ( 1 - -7.05% )	/	( (30.55	+	35.111)	/ 2 )
=	-16.25019	/	32.8305
=	-49.50 %

where

	Invested Capital		(Q: Sep. 2023 )
=	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	))
=	99.536	-	18.061	-	( 50.925	-	max(0, 27.693	-	85.667	+	50.925	))
=	30.55

	Invested Capital		(Q: Dec. 2023 )
=	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	))
=	99.834	-	17.317	-	( 47.406	-	max(0, 30.094	-	85.583	+	47.406	))
=	35.111

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

Edap TMS (NAS:EDAP) 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, Edap TMS's WACC % is 2.63%. Edap TMS's ROIC % is -73.26% (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.

Edap TMS ROIC % Related Terms

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Edap TMS (Edap TMS) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Distribution » Edap TMS SA (NAS:EDAP) » Definitions » ROIC %

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EDA:Germany

Address

Parc d'Activites La Poudrette-Lamartine, 4/6, rue du Dauphine, Vaulx-en-Velin, FRA, 69120

Website

https://www.edap-tms.com

Edap TMS SA is a holding company operating in three divisions namely, HIFU (High-Intensity Focused Ultrasound), ESWL (Extracorporeal ShockWave Lithotripsy), and Distribution. The HIFU division develops, manufactures, and markets devices for the invasive destruction of certain types of tumors using HIFU technology. It markets three HIFU devices: the Ablatherm, Ablatherm Fusion, and the Focal One. The ESWL division is engaged in the manufacturing, marketing, and servicing of its installed base of Sonolith range of lithotripters. The Distribution division markets products that are complementary to its global activity such as lasers, micro-ultrasound systems, and other medical products from third parties. Its geographical segments are Asia, France, United States, and Others.