Aryzta AG (Aryzta AG) ROIC %

: 8.88% (As of Jul. 2023)

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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 %. Aryzta AG's annualized return on invested capital (ROIC %) for the quarter that ended in Jul. 2023 was 8.88%.

As of today (2024-04-19), Aryzta AG's WACC % is 2.88%. Aryzta AG's ROIC % is 7.76% (calculated using TTM income statement data). Aryzta AG 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.

Aryzta AG ROIC % Historical Data

The historical data trend for Aryzta AG'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.

Aryzta AG Annual Data

Trend

Jul13

Jul14

Jul15

Jul16

Jul17

Jul18

Jul19

Jul20

Jul21

Jul22

ROIC %

-1.10

0.44

0.38

-0.72

0.37

Aryzta AG Semi-Annual Data
	Jan14	Jul14	Jan15	Jul15	Jan16	Jul16	Jan17	Jul17	Jan18	Jul18	Jan19	Jul19	Jan20	Jul20	Jan21	Jul21	Jan22	Jul22	Jan23	Jul23
ROIC %																-1.29	9.38	6.09	7.33	8.88

Competitive Comparison

For the Packaged Foods subindustry, Aryzta AG'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.

Aryzta AG ROIC % Distribution

For the Consumer Packaged Goods industry and Consumer Defensive sector, Aryzta AG's ROIC % distribution charts can be found below:

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

Aryzta AG ROIC % Calculation

Aryzta AG's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jul. 2022 is calculated as:

	ROIC % (A: Jul. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jul. 2021 )	+	Invested Capital (A: Jul. 2022 ))	/ count )
=	91.658 * ( 1 - 91.63% )	/	( (2326.123	+	1801.525)	/ 2 )
=	7.6717746	/	2063.824
=	0.37 %

where

	Invested Capital		(A: Jul. 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	))
=	2439.362	-	292.08	-	( 202.009	-	max(0, 791.962	-	613.121	+	202.009	))
=	2326.123

	Invested Capital		(A: Jul. 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	))
=	2118.616	-	316.073	-	( 250.051	-	max(0, 529.603	-	530.621	+	250.051	))
=	1801.525

Aryzta AG's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jul. 2023 is calculated as:

	ROIC % (Q: Jul. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jan. 2023 )	+	Invested Capital (Q: Jul. 2023 ))	/ count )
=	173.008 * ( 1 - 6.37% )	/	( (1697.845	+	1950.664)	/ 2 )
=	161.9873904	/	1824.2545
=	8.88 %

where

	Invested Capital		(Q: Jan. 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	))
=	2182.866	-	564.655	-	( 200.323	-	max(0, 616.703	-	537.069	+	200.323	))
=	1697.845

	Invested Capital		(Q: Jul. 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	))
=	2175.774	-	385.619	-	( 144.69	-	max(0, 633.407	-	472.898	+	144.69	))
=	1950.664

Note: The Operating Income data used here is two times the semi-annual (Jul. 2023) data.

Aryzta AG (OTCPK:ARZTF) 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, Aryzta AG's WACC % is 2.88%. Aryzta AG's ROIC % is 7.76% (calculated using TTM income statement data). Aryzta AG 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. Aryzta AG 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.

Aryzta AG ROIC % Related Terms

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Aryzta AG (Aryzta AG) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Aryzta AG (OTCPK:ARZTF) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

ARZTY:USA ARYNz:UK 0MFY:UK YZAU:Germany ARYN:Switzerland

Address

Ifangstrasse 9, Schlieren, CHE, 8952

Website

https://www.aryzta.com

Aryzta AG is an international specialist food company. Geographically, it has a presence in Switzerland, Germany, France, and other countries. By product segment, bread rolls and artisan loaves are the largest segment, followed by sweet baked & morning goods.