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Groupon ROIC %

: -9.87% (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 %. Groupon's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2022 was -9.87%.

As of today (2022-08-12), Groupon's WACC % is 15.78%. Groupon's ROIC % is -1.24% (calculated using TTM income statement data). Groupon earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Groupon ROIC % Historical Data

The historical data trend for Groupon'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.

Groupon 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 2.50 11.84 4.74 -8.42 5.60

Groupon 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 3.39 4.20 -51.21 -13.66 -9.87

Competitive Comparison

For the Internet Content & Information subindustry, Groupon'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.

   

Groupon ROIC % Distribution

For the Interactive Media industry and Communication Services sector, Groupon's ROIC % distribution charts can be found below:

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



Groupon ROIC % Calculation

Groupon'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 )
=37.24 * ( 1 - -36.72% )/( (949.319 + 870.642)/ 2 )
=50.914528/909.9805
=5.60 %

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))
=1411.507 - 467.15 - ( 850.587 - max(0, 938.988 - 934.026+850.587))
=949.319

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))
=1157.881 - 330.175 - ( 498.726 - max(0, 630.987 - 588.051+498.726))
=870.642

Groupon'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 )
=-77.352 * ( 1 - -2.73% )/( (859.313 + 750.531)/ 2 )
=-79.4637096/804.922
=-9.87 %

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))
=1069.153 - 279.952 - ( 403.006 - max(0, 579.281 - 509.169+403.006))
=859.313

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))
=916.45 - 249.318 - ( 315.595 - max(0, 493.936 - 410.537+315.595))
=750.531

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.


Groupon  (NAS:GRPN) 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, Groupon's WACC % is 15.78%. Groupon's ROIC % is -1.24% (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.


Groupon ROIC % Related Terms

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


Groupon Business Description

Groupon logo
Traded in Other Exchanges
Address
600 West Chicago Avenue, Suite 400, Chicago, IL, USA, 60654
Groupon acts as the middleman between consumers and merchants, offering a variety of products and services at discounts via its online store. It offers consumers daily deals (in the form of online vouchers) from local merchants. Groupon also sells products directly to consumers. It generates revenue from the take rate on the purchase and/or usage of the vouchers (40% of total revenue) and from direct sales (60% of total revenue). More than 65% of Groupon's revenue comes from North America.
Executives
Rpd Fund Management Llc 10 percent owner 767 THIRD AVE 35TH FLOOR NEW YORK NY 10017
Okumus Ahmet H 10 percent owner C/O OKUMUS FUND MANAGEMENT LTD. 767 THIRD AVENUE, 35TH FLOOR NEW YORK NY 10022
Rpd Opportunity Fund Lp 10 percent owner 767 THIRD AVE 35TH FLOOR NEW YORK NY 10017
Pale Fire Capital Se other: See Footnote 1 and Remarks ZATECKA 55/14, JOSEFOV PRAGUE 2N 110 00
Barta Jan other: See Footnote 1 NA BATERIICH 104/35, BREVNOV PRAGUE 2N 16200
Senkypl Dusan other: See Footnote 1 and Remarks JESTRABI 493, OSNICE JESENICE 2N 252 42
Dvorak Kerrie officer: Interim CAO 600 W. CHICAGO AVENUE SUITE 400 CHICAGO IL 60654
Deshpande Kedar director, officer: Chief Executive Officer 600 W CHICAGO AVENUE SUITE 400 CHICAGO IL 60654
Schmitz Damien officer: Interim CFO 600 W CHICAGO AVENUE SUITE 400 CHICAGO IL 60654
Herauf Jeremy officer: Chief Accounting Officer 600 W. CHICAGO AVENUE SUITE 400 CHICAGO IL 60654
Vaid Helen director 600 WEST CHICAGO AVE. STE 400 CHICAGO IL 60654
Mosley Valerie director TWO INTERNATIONAL PLACE BOSTON MA 02110
Cooper Aaron Z. officer: Interim CEO 600 WEST CHICAGO AVE. STE 400 CHICAGO IL 60654
Gangadharan Manjunath officer: Chief Accounting Officer 600 WEST CHICAGO AVE. STE 400 CHICAGO IL 60654
Thomas Melissa officer: CAO & Treasurer 600 WEST CHICAGO AVE STE 400 CHICAGO IL 60654

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By Zacks 2021-11-08

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