ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Zayo Group Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2019 was 4.05%.
As of today (2024-04-25), Zayo Group Holdings's WACC % is 0.00%. Zayo Group Holdings's ROIC % is 0.00% (calculated using TTM income statement data).
Zayo Group Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Zayo Group Holdings ROIC % Historical Data
The historical data trend for Zayo Group 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.
Competitive Comparison of Zayo Group Holdings's ROIC %
For the Communication Equipment subindustry, Zayo Group 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.
Zayo Group Holdings's ROIC % Distribution in the Hardware Industry
For the Hardware industry and Technology sector, Zayo Group Holdings's ROIC % distribution charts can be found below:
* The bar in red indicates where Zayo Group Holdings's ROIC % falls into.
Zayo Group Holdings ROIC % Calculation
Zayo Group Holdings's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jun. 2019 is calculated as:
Note:
The Operating Income data used here is four times the quarterly (Dec. 2019) 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.
Zayo Group Holdings (NYSE:ZAYO) 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, Zayo Group Holdings's WACC % is 0.00%. Zayo Group Holdings's ROIC % is 0.00% (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.
Zayo Group Holdings ROIC % Related Terms
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Zayo Group Holdings (Zayo Group Holdings) Business Description
Zayo owns about 130,000 route miles of fiber, which underlies most of its business and is in over 400 markets throughout the U.S., Canada, and Europe. In its biggest segment, Fiber Solutions, Zayo leases dark fiber on long-term contracts primarily to communications service providers. In its Transport and Enterprise Networks segments, Zayo similarly leases fiber to customers to transport data, but it has a range of offerings over fiber that Zayo has lit, saving customers from having to activate and customize it themselves. Zayo also operates 50 U.S. data centers, provides cloud services, and owns a small Canadian telecom company, Allstream, that serves business customers. In 2018, Zayo announced its intention to split its business into two companies by the end of 2019.
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