Endurance Specialty Holdings (Endurance Specialty Holdings) ROC % : 2.10% (As of Mar. 2017)

Endurance Specialty Holdings ROC % Chart

Endurance Specialty Holdings Annual Data
	Trend	Dec07	Dec08	Dec09	Dec10	Dec11	Dec12	Dec13	Dec14	Dec15	Dec16
ROC %		Get a 7-Day Free Trial					2.67	4.48	4.75	3.98	3.61

Endurance Specialty Holdings Quarterly Data
	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14	Dec14	Mar15	Jun15	Sep15	Dec15	Mar16	Jun16	Sep16	Dec16	Mar17
ROC %	Get a 7-Day Free Trial															4.62	3.22	4.86	1.30	2.10

Endurance Specialty Holdings ROC % Calculation

Endurance Specialty Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2016 is calculated as:

where

Endurance Specialty Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2017 is calculated as:

where

Note: The EBIT data used here is four times the quarterly (Mar. 2017) 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.

Endurance Specialty Holdings  (NYSE:ENHPRACL.PFD) 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, Endurance Specialty Holdings's WACC % is 0.00%. Endurance Specialty Holdings's ROC % is 6.39% (calculated using TTM income statement data). Endurance Specialty Holdings 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.

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Endurance Specialty Holdings (Endurance Specialty Holdings) Business Description