Altria Group (BUE:MO) ROC % : 30.68% (As of Sep. 2024)

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What is Altria Group 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 %. Altria Group's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 30.68%.

As of today (2024-12-11), Altria Group's WACC % is 6.82%. Altria Group's ROC % is 25.12% (calculated using TTM income statement data). Altria Group 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.

Altria Group ROC % Historical Data

The historical data trend for Altria Group'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.

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Altria Group ROC % Chart

Altria Group Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-41.10

18.70

21.93

35.69

33.47

Altria Group Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial															29.34	22.42	33.42	26.91	30.68

Altria Group ROC % Calculation

Altria Group'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 )
=	4168467.004 * ( 1 - 25.6% )	/	( (5245768.355	+	13286966.013)	/ 2 )
=	3101339.450976	/	9266367.184
=	33.47 %

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	))
=	6195337.929	-	1183608.967	-	( 675629.481	-	max(0, 1444472.36	-	1210432.967	+	675629.481	))
=	5245768.355

	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	))
=	13923770.013	-	2706778.002	-	( 1330646.001	-	max(0, 4086159.004	-	2016185.002	+	1330646.001	))
=	13286966.013

Altria Group'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 )
=	12078953.468 * ( 1 - 24.22% )	/	( (29014199.585	+	30656475.153)	/ 2 )
=	9153430.9380504	/	29835337.369
=	30.68 %

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	))
=	30793558.06	-	5578069.42	-	( 1611004.477	-	max(0, 6968780.9	-	3170069.955	+	1611004.477	))
=	29014199.585

	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	))
=	32475732.073	-	6093655.232	-	( 1803098.421	-	max(0, 7600197.666	-	3325799.354	+	1803098.421	))
=	30656475.153

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

Altria Group (BUE:MO) 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, Altria Group's WACC % is 6.82%. Altria Group's ROC % is 25.12% (calculated using TTM income statement data). Altria Group 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.

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.

Altria Group ROC % Related Terms

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Altria Group Business Description

Industry

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MO:USA MO:Mexico 1MO:Italy PHM7d:UK 0R31:UK PHM7:Germany PHM7:Germany PHM7:Germany PHM7:Germany MO:Chile MOOO34:Brazil PHM7:Bulgaria ALTR:Austria

Address

6601 West Broad Street, Richmond, VA, USA, 23230

Website

https://www.altria.com

Altria comprises Philip Morris USA, us Smokeless Tobacco, John Middleton, Horizon Innovations, and Helix Innovations. Through its tobacco subsidiaries, Altria maintains the leading position in cigarettes and smokeless tobacco in the United States and the number-two spot in machine-made cigars. The company's Marlboro brand is the leading cigarette brand in the us with 42% annual share in 2023. Beyond its core business, it holds an 8% interest in the world's largest brewer, Anheuser-Busch InBev, a 42% stake in cannabis manufacturer Cronos, acquired Njoy Holdings in 2023, and operates a joint venture with Japan Tobacco in the heated tobacco category. It also recently disposed of its investment in Juul Labs.