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Workday (NAS:WDAY) ROIC %

: -0.02% (As of Apr. 2023)
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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 %. Workday's annualized return on invested capital (ROIC %) for the quarter that ended in Apr. 2023 was -0.02%.

As of today (2023-06-07), Workday's WACC % is 10.42%. Workday's ROIC % is -2.97% (calculated using TTM income statement data). Workday earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Workday ROIC % Historical Data

The historical data trend for Workday'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.

Workday Annual Data
Trend Jan14 Jan15 Jan16 Jan17 Jan18 Jan19 Jan20 Jan21 Jan22 Jan23
ROIC %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -11.42 -8.63 -3.53 -2.34 -3.18

Workday Quarterly Data
Jul18 Oct18 Jan19 Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23
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 -3.22 -1.33 -3.80 -6.27 -0.02

Competitive Comparison

For the Software - Application subindustry, Workday'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.

   

Workday ROIC % Distribution

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

* The bar in red indicates where Workday's ROIC % falls in comparison to its industry or sector. The grey bar indicates the ROIC %'s extreme value range as defined by GuruFocus.



Workday ROIC % Calculation

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

ROIC % (A: Jan. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Jan. 2022 ) + Invested Capital (A: Jan. 2023 ))/ count )
=-222.2 * ( 1 - -41.08% )/( (10101.218 + 9592.298)/ 2 )
=-313.47976/9846.758
=-3.18 %

where

Invested Capital(A: Jan. 2022 )
=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))
=10498.505 - 251.077 - ( 3644.161 - max(0, 5067.855 - 5214.065+3644.161))
=10101.218

Invested Capital(A: Jan. 2023 )
=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))
=13486.238 - 413.882 - ( 6121.394 - max(0, 4628.166 - 8108.224+6121.394))
=9592.298

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

ROIC % (Q: Apr. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jan. 2023 ) + Invested Capital (Q: Apr. 2023 ))/ count )
=-79.2 * ( 1 - 98.03% )/( (9592.298 + 9083.034)/ 2 )
=-1.56024/9337.666
=-0.02 %

where

Invested Capital(Q: Jan. 2023 )
=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))
=13486.238 - 413.882 - ( 6121.394 - max(0, 4628.166 - 8108.224+6121.394))
=9592.298

Invested Capital(Q: Apr. 2023 )
=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))
=13252.796 - 340.758 - ( 6328.961 - max(0, 4044.089 - 7873.093+6328.961))
=9083.034

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


Workday  (NAS:WDAY) 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, Workday's WACC % is 10.42%. Workday's ROIC % is -2.97% (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.


Workday ROIC % Related Terms

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


Workday (NAS:WDAY) Business Description

Workday logo
Traded in Other Exchanges
Address
6110 Stoneridge Mall Road, Pleasanton, CA, USA, 94588
Workday is a software company that offers human capital management, or HCM, financial management, and business planning solutions. Known for being a cloud-only software provider, Workday is headquartered in Pleasanton, California. Founded in 2005, Workday now employs over 12,000 employees.
Executives
Frederick Wayne A.i. director 500 W MAIN ST., LOUISVILLE KY 40202
David A Duffield 10 percent owner C/O WORKDAY, INC., 6230 STONERIDGE MALL ROAD, PLEASANTON CA 94588
Michael M Mcnamara director C/O FLEXTRONICS INTERNATIONAL LTD, 2090 FORTUNE DRIVE, SAN JOSE CA 95131
Thomas F Bogan director C/O WORKDAY, INC., 6110 STONERIDGE MALL RD, PLEASANTON CA 94588
Barbara A Larson officer: Chief Financial Officer 6110 STONERIDGE MALL ROAD, PLEASANTON CA 94588
Douglas A. Robinson officer: Co-President 6110 STONERIDGE MALL ROAD, PLEASANTON CA 94588
Lynne M Doughtie director C/O THE BOEING COMPANY, 100 RIVERSIDE PLAZA, MC 5003-1001, CHICAGO IL 60606-1596
Michael C Bush director 6110 STONERIDGE MALL ROAD, PLEASANTON CA 94588
Richard Harry Sauer officer: EVP, General Counsel & Secty 6110 STONERIDGE MALL ROAD, PLEASANTON CA 94588
Ann Marie Campbell director 2455 PACES FERRY ROAD, ATLANTA GA 30339
Petros Dermetzis officer: Chief Products Officer 321 LIVORNA HEIGHTS ROAD, ALAMO CA 94507
Carl M. Eschenbach director C/O SEQUOIA CAPITAL, 2800 SAND HILL ROAD, SUITE 101, PALO ALTO CA 94025
Gomez Luciano Fernandez officer: Co-President 1A SHAWFIELD STREET,, RICHARDSON HOUSE, LONDON X0 SW3 4BA
Styslinger Lee J Iii director 2826 BALMORAL ROAD, BIRMINGHAM AL 35223
Robynne Sisco officer: Chief Financial Officer 3401 HILLVIEW AVENUE, PALO ALTO CA 94304

Workday (NAS:WDAY) Headlines

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