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Qualcomm (NAS:QCOM) ROIC %

: 44.65% (As of Sep. 2022)
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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 %. Qualcomm's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2022 was 44.65%.

As of today (2022-12-01), Qualcomm's WACC % is 8.31%. Qualcomm's ROIC % is 43.20% (calculated using TTM income statement data). Qualcomm 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.


Qualcomm (NAS:QCOM) ROIC % Historical Data

The historical data trend for Qualcomm'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.

Qualcomm Annual Data
Trend Sep13 Sep14 Sep15 Sep16 Sep17 Sep18 Sep19 Sep20 Sep21 Sep22
ROIC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -30.99 20.88 27.56 36.77 43.65

Qualcomm Quarterly Data
Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22
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 37.47 48.24 43.24 36.34 44.65

Qualcomm (NAS:QCOM) ROIC % Competitive Comparison

For the Semiconductors subindustry, Qualcomm'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.

   

Qualcomm (NAS:QCOM) ROIC % Distribution

For the Semiconductors industry and Technology sector, Qualcomm's ROIC % distribution charts can be found below:

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



Qualcomm ROIC % Calculation

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

ROIC % (A: Sep. 2022 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Sep. 2021 ) + Invested Capital (A: Sep. 2022 ))/ count )
=15860 * ( 1 - 13.42% )/( (26451 + 36471)/ 2 )
=13731.588/31461
=43.65 %

where

Qualcomm's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2022 is calculated as:

ROIC % (Q: Sep. 2022 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jun. 2022 ) + Invested Capital (Q: Sep. 2022 ))/ count )
=18900 * ( 1 - 15.76% )/( (34842 + 36471)/ 2 )
=15921.36/35656.5
=44.65 %

where

Note: The Operating Income data used here is four times the quarterly (Sep. 2022) 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.


Qualcomm  (NAS:QCOM) 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, Qualcomm's WACC % is 8.31%. Qualcomm's ROIC % is 43.20% (calculated using TTM income statement data). Qualcomm 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. Qualcomm 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.


Qualcomm ROIC % Related Terms

Thank you for viewing the detailed overview of Qualcomm's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.


Qualcomm (NAS:QCOM) Business Description

Qualcomm logo
Address
5775 Morehouse Drive, San Diego, CA, USA, 92121-1714
Qualcomm develops and licenses wireless technology and designs chips for smartphones. The company's key patents revolve around CDMA and OFDMA technologies, which are standards in wireless communications that are the backbone of all 3G and 4G networks. The firm is a leader in 5G network technology as well. Qualcomm's IP is licensed by virtually all wireless device makers. The firm is also the world's largest wireless chip vendor, supplying nearly every premier handset maker with leading-edge processors. Qualcomm also sells RF-front end modules into smartphones and chips into automotive and Internet of Things markets.
Executives
Cathey James J officer: Chief Commercial Officer 5775 MOREHOUSE DRIVE SAN DIEGO CA 92121
Chaplin Ann C officer: General Counsel&Corp Secretary 5775 MOREHOUSE DRIVE SAN DIEGO CA 92121
Acevedo Sylvia director 5775 MOREHOUSE DRIVE SAN DIEGO CA 92121
Johnson Gregory N director C/O INTUIT INC. 2700 COAST AVENUE MOUNTAIN VIEW CA 94043
Tricoire Jean-pascal director 5775 MOREHOUSE DRIVE SAN DIEGO CA 92121
Miller Jamie S director GENERAL ELECTRIC COMPANY 5 NECCO STREET BOSTON MA 02210
Ace Heather S officer: EVP, Human Resources 3721 VALLEY CENTRE DR SUITE 500 SAN DIEGO CA 92130
Palkhiwala Akash J. officer: SVP & Interim CFO 5775 MOREHOUSE DRIVE SAN DIEGO CA 92121
Wise David officer: Interim CFO 5775 MOREHOUSE DRIVE SAN DIEGO CA 92121
Polek Erin L officer: SVP Corporate Controller & CAO 5775 MOREHOUSE DRIVE SAN DIEGO CA 92121
Anstice Martin B director 4650 CUSHING PARKWAY FREMONT CA 94538
Rosenfeld Irene B director 999 VANDERBILT BEACH ROAD SUITE 601 NAPLES FL 34108
Mollenkopf Steven M director, officer: Chief Executive Officer 5775 MOREHOUSE DRIVE SAN DIEGO CA 92121
Smit Neil director C/O AMERICA ONLINE LATIN AMERICA, INC. 6600 N. ANDREWS AVE., SUITE 400 FT. LAUDERDALE FL 33309
Fields Mark director FORD MOTOR COMPANY ONE AMERICAN ROAD DEARBORN MI 48126

Qualcomm (NAS:QCOM) Headlines

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