Furniture Brands International, (FRA:FBN1) ROC % : -38.67% (As of Jun. 2013)

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What is Furniture Brands International, 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 %. Furniture Brands International,'s annualized return on capital (ROC %) for the quarter that ended in Jun. 2013 was -38.67%.

As of today (2024-06-21), Furniture Brands International,'s WACC % is 0.00%. Furniture Brands International,'s ROC % is 0.00% (calculated using TTM income statement data). Furniture Brands International, earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Furniture Brands International, ROC % Historical Data

The historical data trend for Furniture Brands International,'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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Furniture Brands International, ROC % Chart

Furniture Brands International, Annual Data

Trend

Dec03

Dec04

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

ROC %

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-45.58

-16.82

-7.72

-9.00

-9.62

Furniture Brands International, Quarterly Data
	Sep08	Dec08	Mar09	Jun09	Sep09	Dec09	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13
ROC %	Get a 7-Day Free Trial															-5.45	-14.48	-19.30	-17.69	-38.67

Furniture Brands International, ROC % Calculation

Furniture Brands International,'s annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2012 is calculated as:

	ROC % (A: Dec. 2012 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2011 )	+	Invested Capital (A: Dec. 2012 ))	/ count )
=	-33.585 * ( 1 - 3.62% )	/	( (341.966	+	330.892)	/ 2 )
=	-32.369223	/	336.429
=	-9.62 %

where

	Invested Capital		(A: Dec. 2011 )
=	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	))
=	467.017	-	105.757	-	( 19.294	-	max(0, 105.757	-	281.965	+	19.294	))
=	341.966

	Invested Capital		(A: Dec. 2012 )
=	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	))
=	471.252	-	131.316	-	( 9.044	-	max(0, 131.316	-	299.64	+	9.044	))
=	330.892

Furniture Brands International,'s annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2013 is calculated as:

	ROC % (Q: Jun. 2013 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2013 )	+	Invested Capital (Q: Jun. 2013 ))	/ count )
=	-130.944 * ( 1 - 8.85% )	/	( (329.222	+	288.049)	/ 2 )
=	-119.355456	/	308.6355
=	-38.67 %

where

	Invested Capital		(Q: Mar. 2013 )
=	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	))
=	460.353	-	123.193	-	( 7.938	-	max(0, 123.193	-	289.675	+	7.938	))
=	329.222

	Invested Capital		(Q: Jun. 2013 )
=	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	))
=	414.423	-	119.691	-	( 6.683	-	max(0, 119.691	-	268.883	+	6.683	))
=	288.049

Note: The Operating Income data used here is four times the quarterly (Jun. 2013) data.

Furniture Brands International, (FRA:FBN1) 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, Furniture Brands International,'s WACC % is 0.00%. Furniture Brands International,'s ROC % is 0.00% (calculated using TTM income statement data). Furniture Brands International, 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.

Furniture Brands International, ROC % Related Terms

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Furniture Brands International, (FRA:FBN1) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Furnishings, Fixtures & Appliances » Furniture Brands International, Inc. (FRA:FBN1) » Definitions » ROC %

Traded in Other Exchanges

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Address

Website

http://www.furniturebrands.com

Furniture Brands International, Inc., is a Delaware corporation, which was organized in 1921 as a holding company. The Company is engaged in designing, manufacturing, sourcing and retailing of home furnishings. It markets products through a wide range of channels, including its own Thomasville retail stores and through interior designers, multi-line/independent retailers and mass merchant stores. Its portfolio includes Thomasville, Broyhill, Lane, Drexel Heritage, Henredon, Pearson, Hickory Chair, Lane Venture, Maitland-Smith and La Barge. Through these brands, the Company offers case goods, consisting of bedroom, dining room, and living room wood furniture; stationary upholstery products, consisting of sofas, loveseats, sectionals, and chairs; motion upholstered furniture, consisting of recliners and sleep sofas; occasional furniture, consisting of wood, metal and glass tables, accent pieces, home entertainment centers, and home office furniture; and decorative accessories and accent pieces. The Company's brands are featured in every price and product category in the residential furniture industry. Each of its brands targets specific customers in relation to style and price point. The raw materials used in manufacturing its products include lumber, veneers, plywood, fiberboard, particleboard, steel, paper, hardware, adhesives, finishing materials, glass, mirrored glass, fabrics, leathers, metals, stone, synthetics and upholstered filling material. The Company's products compete against domestic manufacturers, importers, and foreign manufacturers entering the United States market; as well as increased direct importing by some larger retailers. Its competitors include: Ashley Furniture Industries, Inc.; La-Z-Boy Incorporated; Ethan Allen Interiors Inc., and many other home furnishings retailers and manufacturers. The elements of competition include price, style, quality, service, brand and marketing.

Furniture Brands International, (FRA:FBN1) Headlines

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