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Walgreens Boots Alliance ROIC %

: 27.96% (As of May. 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 %. Walgreens Boots Alliance's annualized return on invested capital (ROIC %) for the quarter that ended in May. 2022 was 27.96%.

As of today (2022-08-15), Walgreens Boots Alliance's WACC % is 2.95%. Walgreens Boots Alliance's ROIC % is 3.00% (calculated using TTM income statement data). Walgreens Boots Alliance 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.


Walgreens Boots Alliance ROIC % Historical Data

The historical data trend for Walgreens Boots Alliance'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.

Walgreens Boots Alliance Annual Data
Trend Aug12 Aug13 Aug14 Aug15 Aug16 Aug17 Aug18 Aug19 Aug20 Aug21
ROIC %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 9.23 10.29 7.47 0.23 3.11

Walgreens Boots Alliance Quarterly Data
Aug17 Nov17 Feb18 May18 Aug18 Nov18 Feb19 May19 Aug19 Nov19 Feb20 May20 Aug20 Nov20 Feb21 May21 Aug21 Nov21 Feb22 May22
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 3.47 1.60 5.85 4.64 27.96

Competitive Comparison

For the Pharmaceutical Retailers subindustry, Walgreens Boots Alliance'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.

   

Walgreens Boots Alliance ROIC % Distribution

For the Healthcare Providers & Services industry and Healthcare sector, Walgreens Boots Alliance's ROIC % distribution charts can be found below:

* The bar in red indicates where Walgreens Boots Alliance's ROIC % falls into.



Walgreens Boots Alliance ROIC % Calculation

Walgreens Boots Alliance's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Aug. 2021 is calculated as:

ROIC % (A: Aug. 2021 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Aug. 2020 ) + Invested Capital (A: Aug. 2021 ))/ count )
=3481 * ( 1 - 33.43% )/( (80070 + 69035)/ 2 )
=2317.3017/74552.5
=3.11 %

where

Walgreens Boots Alliance's annualized Return on Invested Capital (ROIC %) for the quarter that ended in May. 2022 is calculated as:

ROIC % (Q: May. 2022 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Feb. 2022 ) + Invested Capital (Q: May. 2022 ))/ count )
=-1788 * ( 1 - 1344.44% )/( (80242 + 78944)/ 2 )
=22250.5872/79593
=27.96 %

where

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


Walgreens Boots Alliance  (NAS:WBA) 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, Walgreens Boots Alliance's WACC % is 2.95%. Walgreens Boots Alliance's ROIC % is 3.00% (calculated using TTM income statement data). Walgreens Boots Alliance 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. Walgreens Boots Alliance 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.


Walgreens Boots Alliance ROIC % Related Terms

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Walgreens Boots Alliance Business Description

Walgreens Boots Alliance logo
Address
108 Wilmot Road, Deerfield, IL, USA, 60015
Walgreens Boots Alliance is a leading retail pharmacy chain, with over 13,000 stores in 50 states and 9 countries. Walgreens' core strategy involves brick-and-mortar retail pharmacy locations in high-traffic areas, with nearly 80% of the U.S. population living within 5 miles of a store. Currently, the company has a leading market share of the domestic prescription drug market at about 20%. In 2021, the company sold off a majority of its Alliance Healthcare wholesale business to AmerisourceBergen for $6.5 billion, doubling down on its core pharmacy efforts and ventures in strategic growth areas in primary care (VillageMD) and digital offerings. The company also has equity stakes in AmerisourceBergen (29%) and Sinopharm Holding Guoda Drugstores (40%).
Executives
Shulman Steven J director 1564 NE EXPRESSWAY ATTN: BJ PURCELL ATLANTA GA 30329
May Holly officer: EVP, Global Chief HR Officer 6301 FITCH PATH NEW ALBANY OH 43054
Gray Danielle officer: EVP and Global CLO C/O WALGREENS BOOTS ALLIANCE, INC. 108 WILMOT ROAD DEERFIELD IL 60015
Mahajan Manmohan officer: SVP, Global Controller and CAO C/O WALGREENS BOOTS ALLIANCE, INC. 108 WILMOT ROAD DEERFIELD IL 60015
Brewer Rosalind G director, officer: CEO C/O MOLSON COORS BREWING COMPANY 1225 17TH STREET, SUITE 3200 DENVER CO 80202
Puryear Pamela officer: EVP and Global Chief HRO 253 DOLPHIN COVE QUAY STAMFORD CT 06902
Jarrett Valerie B director USG CORPORATION 125 SOUTH FRANKLIN STREET CHICAGO IL 60606
Standley John T officer: EVP and President, Walgreen Co
Ashworth Richard M officer: SVP, President of Walgreen Co. 200 WILMOT ROAD DEERFIELD IL 60015
Dixon Heather Brianne officer: SVP, Global Controller and CAO AETNA INC. 151 FARMINGTON AVENUE HARTFORD CT 06156
Kehoe James officer: EVP and Global CFO KRAFT FOODS GROUP, INC. THREE LAKES DRIVE NORTHFIELD IL 60093
Almeida Jose E director ONE BAXTER PARKWAY DEERFIELD IL 60015
Roberts Simon John officer: EVP and President, Boots SEDLEY PLACE, 4TH FLOOR 361 OXFORD STREET LONDON X0 W1C 2LJ
Rosenstein Barry director C/O JANA PARTNERS LLC 767 FIFTH AVENUE, 8TH FLOOR NEW YORK NY 10153
Jana Partners Llc director 767 FIFTH AVENUE 8TH FLOOR NEW YORK NY 10153

Walgreens Boots Alliance Headlines

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