Market Cap : 484.31 B | Enterprise Value : 482.24 B | PE Ratio : 9.60 | PB Ratio : 2.60 |
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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 %. Exxon Mobil's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2022 was 23.00%.
As of today (2023-01-26), Exxon Mobil's WACC % is 9.21%. Exxon Mobil's ROIC % is 14.84% (calculated using TTM income statement data). Exxon Mobil 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.
The historical data trend for Exxon Mobil'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.
For the Oil & Gas Integrated subindustry, Exxon Mobil'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.
For the Oil & Gas industry and Energy sector, Exxon Mobil's ROIC % distribution charts can be found below:
* The bar in red indicates where Exxon Mobil's ROIC % falls in comparison to its industry or sector. The grey bar indicates the ROIC %'s extreme value range as defined by GuruFocus.
Exxon Mobil's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2021 is calculated as:
ROIC % (A: Dec. 2021 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (A: Dec. 2020 ) | + | Invested Capital (A: Dec. 2021 )) | / count ) |
= | 24019 * ( 1 - 24.45% ) | / | ( (308315 | + | 284045) | / 2 ) |
= | 18146.3545 | / | 296180 | |||
= | 6.13 % |
where
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 | )) |
= | 332750 | - | 35905 | - | ( 4364 | - | max(0, 56363 | - | 44893 | + | 4364 | )) |
= | 308315 |
Invested Capital | (A: Dec. 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 | )) |
= | 338923 | - | 52367 | - | ( 6802 | - | max(0, 56643 | - | 59154 | + | 6802 | )) |
= | 284045 |
Exxon Mobil'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 ) |
= | 80908 * ( 1 - 20.55% ) | / | ( (281978 | + | 277045) | / 2 ) |
= | 64281.406 | / | 279511.5 | |||
= | 23.00 % |
where
Invested Capital | (Q: Jun. 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 | )) |
= | 367774 | - | 72743 | - | ( 18861 | - | max(0, 80110 | - | 93163 | + | 18861 | )) |
= | 281978 |
Invested Capital | (Q: Sep. 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 | )) |
= | 370152 | - | 67875 | - | ( 30407 | - | max(0, 74057 | - | 99289 | + | 30407 | )) |
= | 277045 |
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.
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, Exxon Mobil's WACC % is 9.21%. Exxon Mobil's ROIC % is 14.84% (calculated using TTM income statement data). Exxon Mobil 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. Exxon Mobil earns returns that do not match up to its cost of capital. It will destroy value as it grows.
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.
Thank you for viewing the detailed overview of Exxon Mobil's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Talley Darrin L | officer: Vice President | 5959 LAS COLINAS BOULEVARD C/O EXXON MOBIL CORPORATION IRVING TX 75039-2298 |
Ubben Jeffrey W | director | 1170 GORGAS AVENUE SAN FRANCISCO CA 94129 |
Mikells Kathryn A | officer: Senior Vice President | 77 W. WACKER DRIVE CHICAGO IL 60601 |
Karsner Alexander | director | C/O APPLIED MATERIALS, INC. 3050 BOWERS AVENUE, P.O. BOX 58039 SANTA CLARA CA 95052-8039 |
Goff Gregory James | director | 19100 RIDGEWOOD PARKWAY SAN ANTONIO TX 78259 |
Hietala Kaisa | director | 5959 LAS COLINAS BOULEVARD C/O EXXON MOBIL CORPORATION 5959 LAS COLINAS BOULEVARD TX 75039-2298 |
Gibbs Jon M. | officer: Executive Officer | 5959 LAS COLINAS BOULEVARD C/O EXXON MOBIL CORPORATION IRVING TX 75039-2298 |
Fox Leonard M. | officer: Vice President and Controller | 5959 LAS COLINAS BOULEVARD C/O EXXON MOBIL CORPORATION IRVING TX 75039-2298 |
Angelakis Michael J | director | 40 MORRIS AVENUE BRYN MAWR PA 19010 |
Zulkiflee Wan | director | 5959 LAS COLINAS BOULEVARD C/O EXXON MOBIL CORPORATION IRVING TX 75039-2298 |
Morford Craig S | officer: Vice President & Gen. Counsel | CARDINAL HEALTH, INC. 7000 CARDINAL PLACE DUBLIN OH 43017 |
Carr Ian S | officer: Vice President | 5959 LAS COLINAS BOULEVARD C/O EXXON MOBIL CORPORATION IRVING TX 75039-2298 |
Littleton Stephen A | officer: Vice President and Secretary | 5959 LAS COLINAS BOULEVARD IRVING TX 75039-2298 |
Hooley Joseph L | director | STATE STREET CORPORATION ONE LINCOLN STREET BOSTON MA 02111 |
Mckee Karen T | officer: Vice President | 5959 LAS COLINAS BOULEVARD IRVING TX 75039-2298 |
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