System Integrator (TSE:3826) ROIC % : 15.19% (As of Nov. 2023)

System Integrator ROIC % Chart

System Integrator Annual Data
	Trend	Feb14	Feb15	Feb16	Feb17	Feb18	Feb19	Feb20	Feb21	Feb22	Feb23
ROIC %		Get a 7-Day Free Trial					47.47	34.53	18.32	24.91	17.69

System Integrator Quarterly Data
	Feb19	May19	Aug19	Nov19	Feb20	May20	Aug20	Nov20	Feb21	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Feb23	May23	Aug23	Nov23
ROIC %	Get a 7-Day Free Trial															11.39	42.05	9.76	28.48	15.19

Competitive Comparison of System Integrator's ROIC %

For the Software - Application subindustry, System Integrator'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.

System Integrator's ROIC % Distribution in the Software Industry

For the Software industry and Technology sector, System Integrator's ROIC % distribution charts can be found below:

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

System Integrator ROIC % Calculation

System Integrator's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Feb. 2023 is calculated as:

where

System Integrator's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Nov. 2023 is calculated as:

where

Note: The Operating Income data used here is four times the quarterly (Nov. 2023) 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.

System Integrator  (TSE:3826) 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, System Integrator's WACC % is 4.33%. System Integrator's ROIC % is 24.10% (calculated using TTM income statement data). System Integrator 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. System Integrator 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.

System Integrator ROIC % Related Terms

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System Integrator (TSE:3826) Business Description