Post Properties (Post Properties) ROIC % : 4.26% (As of Sep. 2016)

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What is Post Properties ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Post Properties's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2016 was 4.26%.

As of today (2024-05-16), Post Properties's WACC % is 0.00%. Post Properties's ROIC % is 5.22% (calculated using TTM income statement data). Post Properties 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.

Post Properties ROIC % Historical Data

The historical data trend for Post Properties'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.

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Post Properties ROIC % Chart

Post Properties Annual Data

Trend

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Dec14

Dec15

ROIC %

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3.69

4.13

4.37

4.79

5.07

Post Properties Quarterly Data
	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15	Dec15	Mar16	Jun16	Sep16
ROIC %	Get a 7-Day Free Trial															5.10	5.20	4.93	5.14	4.26

Competitive Comparison of Post Properties's ROIC %

For the REIT - Residential subindustry, Post Properties'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.

Post Properties's ROIC % Distribution in the REITs Industry

For the REITs industry and Real Estate sector, Post Properties's ROIC % distribution charts can be found below:

* The bar in red indicates where Post Properties's ROIC % falls into.

Post Properties ROIC % Calculation

Post Properties's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2015 is calculated as:

	ROIC % (A: Dec. 2015 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2014 )	+	Invested Capital (A: Dec. 2015 ))	/ count )
=	111.499 * ( 1 - 0% )	/	( (2167.714	+	2234.757)	/ 2 )
=	111.499	/	2201.2355
=	5.07 %

where

	Invested Capital		(A: Dec. 2014 )
=	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	))
=	2311.798	-	96.697	-	( 140.512	-	max(0, 96.697	-	144.084	+	140.512	))
=	2167.714

	Invested Capital		(A: Dec. 2015 )
=	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	))
=	2267.249	-	102.725	-	( 28.611	-	max(0, 102.725	-	32.492	+	28.611	))
=	2234.757

Post Properties's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2016 is calculated as:

	ROIC % (Q: Sep. 2016 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2016 )	+	Invested Capital (Q: Sep. 2016 ))	/ count )
=	97.828 * ( 1 - 0% )	/	( (2280.447	+	2316.604)	/ 2 )
=	97.828	/	2298.5255
=	4.26 %

where

	Invested Capital		(Q: Jun. 2016 )
=	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	))
=	2288.448	-	118.696	-	( 3.875	-	max(0, 118.696	-	8.001	+	3.875	))
=	2280.447

	Invested Capital		(Q: Sep. 2016 )
=	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	))
=	2325.703	-	145.485	-	( 5.06	-	max(0, 145.485	-	9.099	+	5.06	))
=	2316.604

Note: The Operating Income data used here is four times the quarterly (Sep. 2016) data.

Post Properties (NYSE:PPSPRA.PFD) 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, Post Properties's WACC % is 0.00%. Post Properties's ROIC % is 5.22% (calculated using TTM income statement data). Post Properties 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. Post Properties 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.

Post Properties ROIC % Related Terms

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Post Properties (Post Properties) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » REITs » Post Properties Inc (NYSE:PPSPRA.PFD) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

Website

http://www.postproperties.com

Post Properties Inc is a Georgia corporation, which was incorporated on January 25, 1984, and is the successor by merger to the original Post Properties, Inc., a Georgia corporation, which was formed in 1971. It is a self-administrated and self-managed equity real estate investment trust (REIT). The Company and its subsidiaries develop, own and manage upscale multi-family apartment communities in selected markets in the United States. The operating divisions of the Company include Post Apartment Management, Post Investment Group and Post Corporate Services. Post Apartment Management is responsible for the day-to-day operations of all Post(r) communities including community leasing, property management, personnel recruiting, training and development, maintenance and security. Post Apartment Management also conducts short-term corporate apartment leasing activities. It is responsible for all development, acquisition, rehabilitation, disposition, for-sale and asset management activities of the Company. For development, this includes site selection, zoning and regulatory approvals, project design and construction management. This division is also responsible for apartment community acquisitions as well as property dispositions and strategic joint ventures that the Company undertakes as part of its investment plan. Post Corporate Services provides executive direction and control to the Company's other divisions and subsidiaries and has responsibility for the creation and implementation of all Company financing, capital and risk management strategies. All accounting, management reporting, compliance, information systems, human resources, legal, risk management and insurance services required by the Company and all of its affiliates are centralized in Post Corporate Services. The Company, through its wholly-owned subsidiaries, is the general partner and owns a majority interest in the Operating Partnership which, through its subsidiaries, conducts all of the on-going operations of the Company. At December 31, 2009, approximately 35.4%, 23.1%, 11.2% and 10.8% (on a unit basis) of the Company's communities were located in the Atlanta, Georgia, Dallas, Texas, the greater Washington, D.C. and Tampa, Florida metropolitan areas, respectively. At December 31, 2009, 19,863 apartment units in 55 apartment communities, including 1,747 apartment units in five communities held in unconsolidated entities and 1,428 apartment units in four communities currently under construction and/or in lease-up. The Company is also developing and selling 277 luxury for-sale condominium homes in two communities (including 129 units in one community held in an unconsolidated entity) and is completing the sell out of units in one condominium community through a taxable REIT subsidiary. The Company competes for residents in its apartment communities based on its high level of resident service, the quality of its apartment communities and the desirability of its locati

Executives

Morgan John F., Sr.	director	C/O WEYERHAEUSER COMPANY, 220 OCCIDENTAL AVENUE SOUTH, SEATTLE WA 98104
David C. Ward	officer: EVP & Chief Investment Officer	4401 NORTHSIDE PARKWAY, SUITE 800, ATLANTA GA 30327
Toni Jennings	director	C/O NEXTERA ENERGY, INC., 700 UNIVERSE BLVD, JUNO BEACH FL 33408
Donald C Wood	director	909 ROSE AVENUE - SUITE 200, NORTH BETHESDA MD 20852
Sheila J. Teabo	officer: Senior Vice Pres.	4401 NORTHSIDE PARKWAY, SUITE 800, ATLANTA GA 30327
Charles A. Konas	officer: Executive Vice Pres.	4401 NORTHSIDE PARKWAY, SUITE 800, ATLANTA GA 30327
David R. Schwartz	director	4401 NOTHSIDE PARKWAY, SUITE 800, ATLANTA GA 30327-3057
Dale Anne Reiss	director	589 KINZIE ISLAND COURT, SANIBEL FL 33957
Stella Ferguson Thayer	director	4401 NORTHSIDE PARKWAY,, SUITE 800, ATLANTA GA 30327
Deriso Walter M Jr	director	1111 BAY AVENUE, SUITE 501, COLUMBUS GA 31901
Douglas Ii Crocker	director	C/O COLONY NORTHSTAR, INC., 515 S. FLOWER ST., 44TH FLOOR, LOS ANGELES CA 90071
Thomas D Senkbeil	officer: EVP & Chief Financial Officer
Herschel M Bloom	director	755 LEE STREET, PO BOX 272, ALEXANDER CITY AL 35011-0272
Christopher J Papa	officer: Chief Financial Officer	4401 NORTHSIDE PARKWAY, SUITE 800, ATLANTA GA 30327
Nicholas B Paumgarten	director	C/O JP MORGAN CHASE, 227 PARK AVE 45TH FL, NEW YORK NY 10172