AS (Amer Sports) ROC % : 3.96% (As of Sep. 2024)

View and export this data going back to 2024. Start your Free Trial

What is Amer Sports ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Amer Sports's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 3.96%.

As of today (2024-12-15), Amer Sports's WACC % is 6.82%. Amer Sports's ROC % is -4.41% (calculated using TTM income statement data). Amer Sports earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Amer Sports ROC % Historical Data

The historical data trend for Amer Sports's ROC % 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.

Amer Sports ROC % Chart

Amer Sports Annual Data

Trend

Dec20

Dec21

Dec22

Dec23

ROC %

2.24

3.61

4.78

8.94

Amer Sports Quarterly Data
	Dec20	Dec21	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial							64.66	5.64	2.90	-0.01	3.96

Amer Sports ROC % Calculation

Amer Sports's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	304 * ( 1 - -99.62% )	/	( (6627.5	+	6952.6)	/ 2 )
=	606.8448	/	6790.05
=	8.94 %

where

	Invested Capital		(A: Dec. 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	))
=	7895.1	-	865.6	-	( 402	-	max(0, 1279.4	-	2172.7	+	402	))
=	6627.5

	Invested Capital		(A: Dec. 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	))
=	8373.8	-	937.8	-	( 483.4	-	max(0, 1573.9	-	2351.7	+	483.4	))
=	6952.6

Amer Sports's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2024 is calculated as:

	ROC % (Q: Sep. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	706.8 * ( 1 - 56.4% )	/	( (7534.5	+	8033.7)	/ 2 )
=	308.1648	/	7784.1
=	3.96 %

where

	Invested Capital		(Q: Jun. 2024 )
=	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	))
=	8244.7	-	454.3	-	( 255.9	-	max(0, 1170.8	-	2192.7	+	255.9	))
=	7534.5

	Invested Capital		(Q: Sep. 2024 )
=	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	))
=	8828.4	-	482.7	-	( 312	-	max(0, 1571.4	-	2548.3	+	312	))
=	8033.7

Note: The Operating Income data used here is four times the quarterly (Sep. 2024) data.

Amer Sports (NYSE:AS) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. 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 ROC % 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, Amer Sports's WACC % is 6.82%. Amer Sports's ROC % is -4.41% (calculated using TTM income statement data). Amer Sports 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 %, ROC % 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.

Amer Sports ROC % Related Terms

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

Amer Sports Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Travel & Leisure » Amer Sports Inc (NYSE:AS) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

Konepajankuja 6, Helsinki, FIN, 00511

Website

https://www.amersports.com

Amer Sports manages a diverse portfolio of 10 outdoor and action sports brands that collectively generated revenue of $4.4 billion in 2023. Although primarily owned by the Chinese conglomerate Anta Sports, Amer operates with a degree of autonomy. In its rapidly expanding China business, the company is subject to closer oversight, but it manages its operations outside of China with relative independence. In 2023, the firm generates 40% of its revenue from the Americas, 33% from Europe, the Middle East, and Africa, 19% from China, and 7% from Asia-Pacific, excluding China.