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Roku ROIC %

: 25.31% (As of Sep. 2021)
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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 %. Roku's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2021 was 25.31%.

As of today (2021-12-03), Roku's WACC % is 10.11%. Roku's ROIC % is 31.65% (calculated using TTM income statement data). Roku 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.


Roku ROIC % Historical Data

The historical data trend for Roku'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.

Roku Annual Data
Trend Dec15 Dec16 Dec17 Dec18 Dec19 Dec20
ROIC %
Premium Member Only -82.35 -29.56 -13.40 -16.39 -2.72

Roku Quarterly Data
Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21
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 7.50 36.68 37.78 30.56 25.31

Competitive Comparison

For the Entertainment subindustry, Roku'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.

   

Roku ROIC % Distribution

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

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



Roku ROIC % Calculation

Roku's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2020 is calculated as:

ROIC % (A: Dec. 2020 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2019 ) + Invested Capital (A: Dec. 2020 ))/ count )
=-20.253 * ( 1 - 5.12% )/( (659.077 + 753.392)/ 2 )
=-19.2160464/706.2345
=-2.72 %

where

Invested Capital(A: Dec. 2019 )
=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))
=1470.234 - 295.678 - ( 515.479 - max(0, 358.301 - 925.663+515.479))
=659.077

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))
=2270.542 - 424.335 - ( 1092.815 - max(0, 520.321 - 1697.64+1092.815))
=753.392

Roku's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2021 is calculated as:

ROIC % (Q: Sep. 2021 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jun. 2021 ) + Invested Capital (Q: Sep. 2021 ))/ count )
=275.384 * ( 1 - -0.48% )/( (1033.556 + 1153.406)/ 2 )
=276.7058432/1093.481
=25.31 %

where

Invested Capital(Q: Jun. 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))
=3638.558 - 521.729 - ( 2083.273 - max(0, 611.348 - 2799.232+2083.273))
=1033.556

Invested Capital(Q: 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))
=3912.303 - 579.152 - ( 2179.745 - max(0, 668.064 - 2961.781+2179.745))
=1153.406

Note: The Operating Income data used here is four times the quarterly (Sep. 2021) 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.


Roku  (NAS:ROKU) 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, Roku's WACC % is 10.11%. Roku's ROIC % is 31.65% (calculated using TTM income statement data). Roku 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. Roku 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.


Roku ROIC % Related Terms

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


Roku Business Description

Roku logo
Industry
Traded in Other Exchanges
Address
1155 Coleman Avenue, San Jose, CA, USA, 95110
Roku is the leading streaming platform in the U.S. by hours watched with over 40 billion hours of content streamed in 2019. The firm's eponymous operating system is used not only in Roku's own hardware but in co-branded TVs and soundbars from manufacturers like TCL, Onn, and Hisense. Roku generates revenue from advertising, distribution fees, hardware sales, OS licensing, and subscription sales.
Executives
Fyfield Mai director C/O ROKU, INC. 150 WINCHESTER CIRCLE LOS GATOS CA 95032
Wood Anthony J. director, 10 percent owner, officer: CEO and Chairman BOD C/O ROKU, INC. 150 WINCHESTER CIRCLE LOS GATOS CA 95032
Louden Steve officer: CFO C/O ROKU, INC. 150 WINCHESTER CIRCLE LOS GATOS CA 95032
Ozgen Mustafa officer: SVP and GM of Account Acquisit 150 WINCHESTER CIRCLE LOS GATOS CA 95032
Rosenberg Scott A. officer: GM, Sr. VP Platform Business C/O ROKU, INC. 150 WINCHESTER CIRCLE LOS GATOS CA 95032
Kay Stephen H officer: SVP General Counsel, Secretary 6922 HOLLYWOOD BLVD., 12TH FLOOR LOS ANGELES CA 90028
Ahuja Ravi director C/O TWENTY-FIRST CENTURY FOX, INC. 1211 AVENUE OF THE AMERICAS NEW YORK NY 10036
Henricks Alan S. director MODEL N, INC. 777 MARINERS ISLAND BLVD., SUITE 300 SAN MATEO CA 94404
Rothrock Ray A. director 3340 HILLVIEW AVENUE PALO ALTO CA 94304
Hastings Jeff director AVID TECHNOLOGY, INC. ONE PARK WEST TEWKSBURY MA 01876
Hunt Neil D director C/O NETFLIX, INC 100 WINCHESTER CIRCLE LOS GATOS CA 95032
Smith Chas officer: GM, Sr. VP Roku TV & Players C/O ROKU, INC. 150 WINCHESTER CIRCLE LOS GATOS CA 95032
Mv Management X, L.l.c. 10 percent owner 3000 SAND HILL ROAD BUILDING 4, SUITE 100 MENLO PARK CA 94025
Mmef X Lp 10 percent owner C/O MENLO VENTURES 2884 SAND HILL RD SUITE 100 MENLO PARK CA 94025
Menlo Entrepreneurs Fund X Lp 10 percent owner C/O MENLO VENTURES 2884 SAND HILL RD SUITE 100 MENLO PARK CA 94025

Roku Headlines

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