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Emeco Holdings ROIC %

: 10.30% (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 %. Emeco Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2021 was 10.30%.

As of today (2021-12-04), Emeco Holdings's WACC % is 17.63%. Emeco Holdings's ROIC % is 9.40% (calculated using TTM income statement data). Emeco Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Emeco Holdings ROIC % Historical Data

The historical data trend for Emeco 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.

Emeco Holdings Annual Data
Trend Jun12 Jun13 Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21
ROIC %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 1.88 -6.64 17.91 18.39 9.66

Emeco Holdings Semi-Annual Data
Dec11 Jun12 Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jun17 Dec17 Jun18 Dec18 Jun19 Dec19 Jun20 Dec20 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 17.26 17.01 21.42 8.98 10.30

Competitive Comparison

For the Rental & Leasing Services subindustry, Emeco 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.

   

Emeco Holdings ROIC % Distribution

For the Business Services industry and Industrials sector, Emeco Holdings's ROIC % distribution charts can be found below:

* The bar in red indicates where Emeco Holdings's ROIC % falls into.



Emeco Holdings ROIC % Calculation

Emeco Holdings's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jun. 2021 is calculated as:

ROIC % (A: Jun. 2021 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Jun. 2020 ) + Invested Capital (A: Jun. 2021 ))/ count )
=84.107033639144 * ( 1 - 30.07% )/( (621.04485852312 + 596.94724770642)/ 2 )
=58.816048623853/608.99605311477
=9.66 %

where

Invested Capital(A: Jun. 2020 )
=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))
=751.27053140097 - 61.585231193927 - ( 136.76259489303 - max(0, 161.30779848171 - 229.94824016563+136.76259489303))
=621.04485852312

Invested Capital(A: Jun. 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))
=738.18348623853 - 84.107033639144 - ( 57.129204892966 - max(0, 112.89908256881 - 174.80351681957+57.129204892966))
=596.94724770642

Emeco 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: Dec. 2020 ) + Invested Capital (Q: Jun. 2021 ))/ count )
=86.091743119266 * ( 1 - 29.43% )/( (582.71912650602 + 596.94724770642)/ 2 )
=60.754943119266/589.83318710622
=10.30 %

where

Invested Capital(Q: Dec. 2020 )
=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))
=701.00225903614 - 68.237951807229 - ( 54.077560240964 - max(0, 102.71987951807 - 152.76506024096+54.077560240964))
=582.71912650602

Invested Capital(Q: Jun. 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))
=738.18348623853 - 84.107033639144 - ( 57.129204892966 - max(0, 112.89908256881 - 174.80351681957+57.129204892966))
=596.94724770642

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


Emeco Holdings  (OTCPK:EOHDF) 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, Emeco Holdings's WACC % is 17.63%. Emeco Holdings's ROIC % is 9.40% (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.


Emeco Holdings ROIC % Related Terms

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Emeco Holdings Business Description

Emeco Holdings logo
Industry
Traded in Other Exchanges
Address
Level 3, 71 Walters Drive, Osborne Park, Perth, WA, AUS, 6017
Emeco Holdings Ltd owns and operates a fleet of original equipment manufacturer machines to deliver equipment rental solutions. Its reportable segments are Australian Rental that provides a wide range of earthmoving equipment to customers in Australia, Australian Workshops which is engaged in providing maintenance services to customers in Australia and Pit N Portal which provides a range of mining services solutions and associated services to customers in Australia.. The company generates a majority of its revenue from the Australian Rental Segment. Geographically, it generates a majority of its revenue from Australia.

Emeco Holdings Headlines

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