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SolarEdge Technologies ROIC %

: 13.01% (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 %. SolarEdge Technologies's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2021 was 13.01%.

As of today (2021-10-27), SolarEdge Technologies's WACC % is 7.92%. SolarEdge Technologies's ROIC % is 11.05% (calculated using TTM income statement data). SolarEdge Technologies 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.


SolarEdge Technologies ROIC % Historical Data

The historical data trend for SolarEdge Technologies'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.

SolarEdge Technologies Annual Data
Trend Jun12 Jun13 Jun14 Jun15 Jun16 Dec17 Dec18 Dec19 Dec20
ROIC %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only 56.91 31.02 32.91 21.67 11.97

SolarEdge Technologies Quarterly Data
Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 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 13.41 14.49 4.23 12.13 13.01

Competitive Comparison

For the Solar subindustry, SolarEdge Technologies'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.

   

SolarEdge Technologies ROIC % Distribution

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

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



SolarEdge Technologies ROIC % Calculation

SolarEdge Technologies's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2020 is calculated as:

ROIC % (A: Dec. 2020 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2019 ) + Invested Capital (A: Dec. 2020 ))/ count )
=142.561 * ( 1 - 14.26% )/( (925.535 + 1117.268)/ 2 )
=122.2318014/1021.4015
=11.97 %

where

Invested Capital(A: Dec. 2019 )
=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))
=1494.624 - 248.333 - ( 320.756 - max(0, 436.714 - 932.763+320.756))
=925.535

Invested Capital(A: 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))
=2437.109 - 288.912 - ( 1030.929 - max(0, 436.099 - 1719.341+1030.929))
=1117.268

SolarEdge Technologies'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: Mar. 2021 ) + Invested Capital (Q: Jun. 2021 ))/ count )
=222.236 * ( 1 - 16.21% )/( (1299.73 + 1562.518)/ 2 )
=186.2115444/1431.124
=13.01 %

where

Invested Capital(Q: Mar. 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))
=2464.595 - 297.003 - ( 867.862 - max(0, 397.726 - 1585.107+867.862))
=1299.73

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))
=2564.325 - 318.447 - ( 683.36 - max(0, 399.585 - 1488.911+683.36))
=1562.518

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


SolarEdge Technologies  (NAS:SEDG) 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, SolarEdge Technologies's WACC % is 7.92%. SolarEdge Technologies's ROIC % is 11.05% (calculated using TTM income statement data). SolarEdge Technologies 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. SolarEdge Technologies 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.


SolarEdge Technologies ROIC % Related Terms

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SolarEdge Technologies Business Description

SolarEdge Technologies logo
Industry
Technology » Semiconductors NAICS : 334413 SIC : 3674
Traded in Other Exchanges
Address
1 HaMada Street, Post Box 12001, Herziliya Pituach, ISR, 4673335
SolarEdge Technologies designs, develops, and sells direct current optimized inverter systems for solar photovoltaic installations. The company system consists of power optimizers, inverters, and cloud-based monitoring platform and addresses a broad range of solar market segments, from residential solar installations to commercial and small utility-scale solar installations. The company sells its products directly to solar installers, engineering, procurement, and construction firms and indirectly to solar installers through distributors and electrical equipment wholesalers. Additionally, the company has nonsolar products targeting the energy storage, e-mobility, and ultracritical power solutions industries.
Executives
Prishkolnik Rachel officer: VP,GC&Corporate Secretary 1 HAMADA STREET HERZILIYA PITUACH L3 4673335
Adest Meir officer: VP, Core Technologies 1 HAMADA STREET HERZILIYA PITUACH L3 4673335
Gani Marcel director 142 ALMENDRAL AVE ATHERTON CA 94027
Inbar Doron director C/O CARMEL VENTURES 12 ABBA EBAN AVENUE HERZELIYA L3 46725
Galin Yoav officer: VP Research & Development 1 HAMADA STREET HERZILIYA PITUACH L3 4673335
Faier Ronen officer: Chief Financial Officer MARVA 11 HERZLIA L3 46417
Avery More director 5930 ROYAL LANE SUITE E-120 DALLAS TX 75230
Handelsman Lior officer: VP, Marketing&Product Strategy 1 HAMADA STREET HERZILIYA PITUACH L3 4673335
Lando Zvi officer: CEO 1 HAMADA STREET HERZILIYA PITUACH L3 4673335
Avida Dan director 2730 SAND HILL ROAD SUITE 150 MENLO PARK CA 94025
Cheifetz Jonathan director 9 EIN YAKOV ST. TEL AVIV L3 65155
Payne Tal director 1 HAMADA STREET HERZILIYA PITUACH L3 4673335
Zafrir Nadiv director 555 WEST 59 STREET APT 19B NEW YORK NY 10019
Bechor Uri officer: Chief Operating Officer 1 HAMADA STREET HERZILIYA PITUACH L3 4673335
Sella Guy officer: CEO HTEENA 9 BAT HEN L3 40294

SolarEdge Technologies Headlines

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