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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 %. Vista Outdoor's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 4.93%.
As of today (2024-04-19), Vista Outdoor's WACC % is 9.86%. Vista Outdoor's ROIC % is 10.21% (calculated using TTM income statement data). Vista Outdoor 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.
The historical data trend for Vista Outdoor'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.
For the Leisure subindustry, Vista Outdoor'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.
For the Travel & Leisure industry and Consumer Cyclical sector, Vista Outdoor's ROIC % distribution charts can be found below:
* The bar in red indicates where Vista Outdoor's ROIC % falls into.
Vista Outdoor's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Mar. 2023 is calculated as:
ROIC % (A: Mar. 2023 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (A: Mar. 2022 ) | + | Invested Capital (A: Mar. 2023 )) | / count ) |
= | 482.21 * ( 1 - 119.18% ) | / | ( (2174.475 | + | 2521.089) | / 2 ) |
= | -92.487878 | / | 2347.782 | |||
= | -3.94 % |
where
Invested Capital | (A: 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 | )) |
= | 2396.201 | - | 199.142 | - | ( 22.584 | - | max(0, 393.873 | - | 1110.943 | + | 22.584 | )) |
= | 2174.475 |
Invested Capital | (A: Mar. 2023 ) | |||||||||||
= | 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 | )) |
= | 2798.882 | - | 191.585 | - | ( 86.208 | - | max(0, 453.871 | - | 1196.114 | + | 86.208 | )) |
= | 2521.089 |
Vista Outdoor's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2023 is calculated as:
ROIC % (Q: Dec. 2023 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Sep. 2023 ) | + | Invested Capital (Q: Dec. 2023 )) | / count ) |
= | 155.052 * ( 1 - 24.08% ) | / | ( (2544.385 | + | 2234.743) | / 2 ) |
= | 117.7154784 | / | 2389.564 | |||
= | 4.93 % |
where
Invested Capital | (Q: Sep. 2023 ) | |||||||||||
= | 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 | )) |
= | 2746.799 | - | 162.46 | - | ( 39.954 | - | max(0, 517.451 | - | 1187.889 | + | 39.954 | )) |
= | 2544.385 |
Invested Capital | (Q: Dec. 2023 ) | |||||||||||
= | 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 | )) |
= | 2453.601 | - | 161.83 | - | ( 57.028 | - | max(0, 440.032 | - | 1136.199 | + | 57.028 | )) |
= | 2234.743 |
Note: The Operating Income data used here is four times the quarterly (Dec. 2023) 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.
Vista Outdoor (NYSE:VSTO) 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, Vista Outdoor's WACC % is 9.86%. Vista Outdoor's ROIC % is 10.21% (calculated using TTM income statement data). Vista Outdoor 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. Vista Outdoor 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.
Thank you for viewing the detailed overview of Vista Outdoor's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Gary L Mcarthur | director | HARRIS CORPORATION, 1025 W. NASA BOULEVARD, MELBOURNE FL 32919 |
Yun Jung Choi | officer: VP, GC & Corp Secretary | C/O BOXED, INC., 451 BROADWAY, 2ND FLOOR, NEW YORK NY 10013 |
Eric Nyman | officer: CEO | C/O HASBRO, INC., 1011 NEWPORT AVENUE, PAWTUCKET RI 02861 |
Michael D Robinson | director | 1291 5TH AVE, SAN FRANCISCO CA 94122 |
Jason R Vanderbrink | officer: President, Ammunition | 900 BOB EHLEN DRIVE, ANOKA MN 55303 |
Jeffrey Ehrich | officer: GC & Corp Secretary - Interim | 656 EVANS COURT, SHOREVIEW MN 55126 |
Andrew Keegan | officer: Interim CFO | 4035 DAHL RD, MOUND MN 55364 |
Kelly L Reisdorf | officer: Chief Comms & IR Officer | 1 VISTA WAY, ANOKA MN 55303 |
Bruce Grooms | director | C/O EMCORE CORPORATION, 2015 CHESTNUT ST., ALHAMBRA CA 91803 |
Gerard Gibbons | director | 616 GLENOVER DRIVE, MILTON GA 30004 |
Christopher T Metz | director, officer: CEO | BLACK & DECKER CORP, 701 EAST JOPPA ROAD, TOWSON MD 21286 |
Dylan Scott Ramsey | officer: VP,General Counsel & Secretary | 1 VISTA WAY, ANOKA MN 55303 |
Sudhanshu Shekhar Priyadarshi | officer: SVP & CFO | 6425 HALL OF FAME LANE, FRISCO TX 75034 |
Robert M Tarola | director | 1101 30TH STREET, NW, SUITE 500, WASHINGTON DC 20007 |
Mark A. Gottfredson | director | 938 UNIVERSITY PARK BOULEVARD, SUITE 200, CLEARFIELD UT 84015 |
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