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Laboratory of America Holdings ROIC %

: 12.47% (As of Jun. 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 %. Laboratory of America Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2021 was 12.47%.

As of today (2021-10-15), Laboratory of America Holdings's WACC % is 6.70%. Laboratory of America Holdings's ROIC % is 18.86% (calculated using TTM income statement data). Laboratory of America Holdings 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.


Laboratory of America Holdings ROIC % Historical Data

The historical data trend for Laboratory of America Holdings'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.

Laboratory of America Holdings Annual Data
Trend Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20
ROIC %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.88 11.07 6.37 6.61 12.17

Laboratory of America Holdings Quarterly Data
Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21
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 6.03 19.99 23.37 19.23 12.47

Competitive Comparison

For the Diagnostics & Research subindustry, Laboratory of America Holdings'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.

   

Laboratory of America Holdings ROIC % Distribution

For the Medical Diagnostics & Research industry and Healthcare sector, Laboratory of America Holdings's ROIC % distribution charts can be found below:

* The bar in red indicates where Laboratory of America Holdings's ROIC % falls into.



Laboratory of America Holdings ROIC % Calculation

Laboratory of America Holdings'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 )
=2948.1 * ( 1 - 29.84% )/( (16620.9 + 17377.5)/ 2 )
=2068.38696/16999.2
=12.17 %

where

Laboratory of America Holdings's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2021 is calculated as:

ROIC % (Q: Jun. 2021 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Mar. 2021 ) + Invested Capital (Q: Jun. 2021 ))/ count )
=2854.8 * ( 1 - 28.07% )/( (16396.9 + 16536.1)/ 2 )
=2053.45764/16466.5
=12.47 %

where

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


Laboratory of America Holdings  (NYSE:LH) 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, Laboratory of America Holdings's WACC % is 6.70%. Laboratory of America Holdings's ROIC % is 18.86% (calculated using TTM income statement data). Laboratory of America Holdings 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. Laboratory of America Holdings 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.


Laboratory of America Holdings ROIC % Related Terms

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Laboratory of America Holdings Business Description

Laboratory of America Holdings logo
Industry
Traded in Other Exchanges
Address
358 South Main Street, Burlington, NC, USA, 27215
Laboratory Corporation of America is one of the nation's two largest independent clinical laboratories, with roughly 20% of the independent lab market. The company operates approximately 2,000 patient-service centers, offering a broad range of 5,000 clinical lab tests, ranging from routine blood and urine screens to complex oncology and genomic testing. With the addition of Covance, LabCorp also has a sizable footprint in the global contract research organization market.
Executives
Caveney Brian J officer: EVP, President of Diagnostics 531 SOUTH SPRING STREET BURLINGTON NC 27215
Wilkinson Peter J officer: SVP, Chief Accounting Officer C/O PHARMACEUTICAL PRODUCT DEVELOPMENT 929 NORTH FRONT STREET WILMINGTON NC 28401
Williams R Sanders director DUKE UNIVERSITY SCHOOL OF MEDICINE TRENT DRIVE DURHAM NC 27706
Van Der Vaart Sandra D officer: EVP, Chief Legal Officer 531 SOUTH SPRING STREET BURLINGTON NC 27215
King David P director 531 SOUTH SPRING STREET BURLINGTON NC 27215
Kirchgraber Paul R officer: CEO, Covance Drug Development 531 SOUTH SPRING STREET BURLINGTON NC 27215
Schroeder Mark S officer: EVP, President-Diagnostics Lab 531 SOUTH SPRING STREET BURLINGTON NC 27215
Eisenberg Glenn A officer: Chief Financial Officer, EVP P O BOX 1017 CHARLOTTE NC 28201-1017
Berberian Lance officer: EVP, CIO & CTO PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: BERBERIAN LANCE a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Summy Amy B. officer: EVP, Chief Marketing Officer 531 SOUTH SPRING STREET BURLINGTON NC 27215
Seltz Judith C officer: EVP, CHRO 531 SOUTH SPRING STREET BURLINGTON NC 27215
Belingard Jean-luc director 1401 HARBOR BAY PARKWAY ALAMEDA CA 94502
Gilliland Dwight Gary director 531 SOUTH SPRING STREET BURLINGTON NC 27215
Kong Garheng director 712 COLLEGE AVENUE MENLO PARK CA 94025
Neupert Peter M director 13920 SE EASTGATE WAY STE 300 BELLEVUE WA 98005

Laboratory of America Holdings Headlines

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