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Ciena (CIEN) ROC % : 1.25% (As of Apr. 2024)


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What is Ciena 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 %. Ciena's annualized return on capital (ROC %) for the quarter that ended in Apr. 2024 was 1.25%.

As of today (2024-07-21), Ciena's WACC % is 8.93%. Ciena's ROC % is 5.73% (calculated using TTM income statement data). Ciena earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Ciena ROC % Historical Data

The historical data trend for Ciena'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.

Ciena ROC % Chart

Ciena Annual Data
Trend Oct14 Oct15 Oct16 Oct17 Oct18 Oct19 Oct20 Oct21 Oct22 Oct23
ROC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 12.15 15.88 20.83 6.93 8.10

Ciena Quarterly Data
Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23 Jul23 Oct23 Jan24 Apr24
ROC % Get a 7-Day Free Trial 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 7.45 3.84 12.56 6.23 1.25

Ciena ROC % Calculation

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

ROC % (A: Oct. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Oct. 2022 ) + Invested Capital (A: Oct. 2023 ))/ count )
=384.853 * ( 1 - 21.27% )/( (3362.583 + 4117.938)/ 2 )
=302.9947669/3740.2605
=8.10 %

where

Invested Capital(A: Oct. 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))
=5069.632 - 558.708 - ( 1148.341 - max(0, 1040.583 - 3385.896+1148.341))
=3362.583

Invested Capital(A: Oct. 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))
=5601.495 - 368.186 - ( 1115.371 - max(0, 932.021 - 3575.779+1115.371))
=4117.938

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

ROC % (Q: Apr. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jan. 2024 ) + Invested Capital (Q: Apr. 2024 ))/ count )
=46.76 * ( 1 - -5.12% )/( (3858.978 + 3981.856)/ 2 )
=49.154112/3920.417
=1.25 %

where

Invested Capital(Q: Jan. 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))
=5593.21 - 362.803 - ( 1371.429 - max(0, 841.306 - 3608.747+1371.429))
=3858.978

Invested Capital(Q: Apr. 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))
=5614.803 - 376.038 - ( 1256.909 - max(0, 912.191 - 3541.347+1256.909))
=3981.856

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


Ciena  (NYSE:CIEN) 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, Ciena's WACC % is 8.93%. Ciena's ROC % is 5.73% (calculated using TTM income statement data). Ciena 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.


Ciena ROC % Related Terms

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Ciena (CIEN) Business Description

Address
7035 Ridge Road, Hanover, MD, USA, 21076
Ciena Corp is a network and technology company. It provides network hardware, software, and services that support the transport, switching, aggregation, service delivery, and management of video, data, and voice traffic on communications networks. It serves various industries such as communication services providers, web-scale providers, cable operators, government, and large enterprises world-wide. The business activities function through Networking Platforms; Platform Software and Services; Blue Planet Automation Software, and Global Services segments. Geographically, its presence is seen in the markets of the United States, Canada, the Caribbean, Latin America, Europe, the Middle East, Africa, the Asia Pacific, Japan, and India. The maximum revenue is generated from Americas.
Executives
David M Rothenstein officer: Sr. VP, General Counsel 7035 RIDGE ROAD, HANOVER MD 21076
Gary B Smith director, officer: President, CEO C/O CIENA CORPORATION, 7035 RIDGE ROAD, HANOVER MD 21076
Brodie Gage officer: SVP Global Products & Supply 2351 ALFRED-NOBEL BLVD, SUITE N-300, SAINT LAURENT A8 H4S 2A9
Dino Diperna officer: SVP Global R&D 385 TERRY FOX DR, OTTAWA A6 K2K OL1
Jason Phipps officer: SVP Global Sales and Marketing 7410 RIDGE RD, HANOVER MD 21076
Joseph Cumello officer: SVP, General Mgr. Blue Planet 7035 RIDGE RD, HANOVER MD 21076
Scott Mcfeely officer: SVP, Networking Platforms 7035 RIDGE RD, HANOVER MD 21076
Mary G Puma director AXCELIS TECHNOLOGIES INC., 108 CHERRY HILL DRIVE, BEVERLY MA 01915
Andrew C Petrik officer: VP, CONTROLLER 7035 RIDGE ROAD, HANOVER MD 21076
Sheela Kosaraju officer: SVP, General Counsel 43-51 WORSHIP ST, LONDON X0 EC2A 2DX
Stephen B Alexander officer: SVP, Chief Technology Officer C/O CIENA CORPORATION, 7035 RIDGE ROAD, HANOVER MD 21076
Rick Hamilton officer: SVP, Software and Services 9500 AMBERGIEN, AUSTIN TX 78729
Moylan James E Jr officer: SVP Finance, CFO CIENA CORPORATION, 7035 RIDGE ROAD, HANOVER MD 21076
Judith M Obrien director 855 MAUDE AVENUE, MOUNTAIN VIEW CA 94043
Thomas Michael Nevens director C/O BORLAND SOFTWARE CORPORATION, 20450 STEVENS CREEK BLVD, SUITE 800, CUPERTINO CA 95014