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Powell Industries ROIC %

: 3.65% (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 %. Powell Industries's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2022 was 3.65%.

As of today (2022-08-17), Powell Industries's WACC % is 8.02%. Powell Industries's ROIC % is 0.71% (calculated using TTM income statement data). Powell Industries earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Powell Industries ROIC % Historical Data

The historical data trend for Powell Industries'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.

Powell Industries Annual Data
Trend Sep12 Sep13 Sep14 Sep15 Sep16 Sep17 Sep18 Sep19 Sep20 Sep21
ROIC %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -3.51 -2.51 2.71 6.20 0.23

Powell Industries 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 -3.31 5.11 -4.30 -0.90 3.65

Competitive Comparison

For the Electrical Equipment & Parts subindustry, Powell Industries'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.

   

Powell Industries ROIC % Distribution

For the Industrial Products industry and Industrials sector, Powell Industries's ROIC % distribution charts can be found below:

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



Powell Industries ROIC % Calculation

Powell Industries's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Sep. 2021 is calculated as:

ROIC % (A: Sep. 2021 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Sep. 2020 ) + Invested Capital (A: Sep. 2021 ))/ count )
=1.019 * ( 1 - 42.22% )/( (253.696 + 253.357)/ 2 )
=0.5887782/253.5265
=0.23 %

where

Invested Capital(A: Sep. 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))
=472.278 - 39.661 - ( 178.921 - max(0, 152.947 - 335.658+178.921))
=253.696

Invested Capital(A: Sep. 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))
=436.192 - 48.854 - ( 133.981 - max(0, 121.156 - 302.461+133.981))
=253.357

Powell Industries'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 )
=3.396 * ( 1 - -210.52% )/( (273.985 + 304.413)/ 2 )
=10.5452592/289.199
=3.65 %

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))
=439.705 - 52.146 - ( 113.574 - max(0, 132.883 - 311.679+113.574))
=273.985

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.


Powell Industries  (NAS:POWL) 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, Powell Industries's WACC % is 8.02%. Powell Industries's ROIC % is 0.71% (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.


Powell Industries ROIC % Related Terms

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Powell Industries Business Description

Powell Industries logo
Traded in Other Exchanges
Address
8550 Mosley Road, Houston, TX, USA, 77075-1180
Powell Industries Inc is a United States-based company that develops, designs, manufactures, and services custom-engineered equipment and systems for electrical energy distribution, control, and monitoring. The company's principal products comprise integrated power control room substations, custom-engineered modules, electrical houses, traditional and arc-resistant distribution switchgear and control gear, and so on. These products are applied in oil and gas refining, offshore oil and gas production, petrochemical, pipeline, terminal, mining and metals, light-rail traction power, electric utility, pulp and paper, and other heavy industrial markets. The company generates the majority of its sales from the United States.
Executives
Stacey John director C/O HARMAN INTERNATIONAL 1101 PENNSYLVANIA AVE, NW #1010 WASHINGTON DC 20004
Curtis Katheryn Baucom director 8550 MOSLEY ROAD HOUSTON TX 77075
Metcalf Michael William officer: Exec Vice President 8550 MOSLEY ROAD HOUSTON TX 77075
Mcgill James W director 8550 MOSLEY ROAD HOUSTON TX 77075
Elders Perry L director 8550 MOSLEY ROAD HOUSTON TX 77075
Clelland William N. director, other: ADVISORY DIRECTOR 8550 MOSLEY ROAD HOUSTON TX 77075
Williams Richard E director 8550 MOSLEY ROAD HOUSTON X1 77075
Cope Brett Alan officer: Sr VP, COO 8550 MOSLEY ROAD HOUSTON TX 77075
Dial Neil officer: COO 8550 MOSLEY ROAD HOUSTON TX 77075
Power One Inc officer: COO 740 CALLE PLANO CAMARILLO CA 93012
White John David director 8550 MOSLEY ROAD HOUSTON TX 77075
Lucas Michael Allan officer: President & CEO 13131 DAIRY ASHFORD, SUITE 600 SUGAR LAND TX 77478
Rozzell Scott E director
Hancock Bonnie V director P O BOX 12818 HOUSTON TX 77075
Cragg Christopher E director

Powell Industries Headlines

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