TI Fluid Systems (FRA:TI1) ROC % : 7.58% (As of Jun. 2024)

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What is TI Fluid Systems 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 %. TI Fluid Systems's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 7.58%.

As of today (2024-12-14), TI Fluid Systems's WACC % is 6.76%. TI Fluid Systems's ROC % is 8.41% (calculated using TTM income statement data). TI Fluid Systems 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.

TI Fluid Systems ROC % Historical Data

The historical data trend for TI Fluid Systems'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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TI Fluid Systems ROC % Chart

TI Fluid Systems Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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7.72

-1.07

1.99

-12.08

8.17

TI Fluid Systems Semi-Annual Data
	Dec14	Dec15	Dec16	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23	Jun24
ROC %	Get a 7-Day Free Trial												0.11	-26.66	6.66	9.42	7.58

TI Fluid Systems ROC % Calculation

TI Fluid Systems'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 )
=	192.7 * ( 1 - 30.97% )	/	( (1665.7	+	1588.8)	/ 2 )
=	133.02081	/	1627.25
=	8.17 %

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	))
=	2786	-	629.3	-	( 491	-	max(0, 673.5	-	1415.6	+	491	))
=	1665.7

	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	))
=	2693.8	-	688.3	-	( 416.7	-	max(0, 729.9	-	1358.3	+	416.7	))
=	1588.8

TI Fluid Systems's annualized Return on Capital (ROC %) for the quarter that ended in Jun. 2024 is calculated as:

	ROC % (Q: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	191.6 * ( 1 - 34.31% )	/	( (1588.8	+	1730.9)	/ 2 )
=	125.86204	/	1659.85
=	7.58 %

where

	Invested Capital		(Q: 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	))
=	2693.8	-	688.3	-	( 416.7	-	max(0, 729.9	-	1358.3	+	416.7	))
=	1588.8

	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	))
=	2735.6	-	670.1	-	( 334.6	-	max(0, 717.6	-	1378.4	+	334.6	))
=	1730.9

Note: The Operating Income data used here is two times the semi-annual (Jun. 2024) data.

TI Fluid Systems (FRA:TI1) 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, TI Fluid Systems's WACC % is 6.76%. TI Fluid Systems's ROC % is 8.41% (calculated using TTM income statement data). TI Fluid Systems 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.

TI Fluid Systems ROC % Related Terms

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TI Fluid Systems Business Description

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Address

4650 Kingsgate, Cascade Way, Oxford Business Park South, Oxford, Oxfordshire, GBR, OX4 2SU

Website

https://www.tifluidsystems.com

TI Fluid Systems PLC is engaged in providing automotive fluid storage, carrying, and delivery systems for the light-duty automotive market. The operating segments of the company are fluid-carrying systems and fuel tank delivery systems. The fluid-carrying systems include brake and fuel lines and bundles, tank top lines, vacuum booster lines, quick connectors, air conditioning tubes, and hose assemblies, accumulators and receiver dryers, and thermal products and powertrain components. The fuel tank and delivery systems include fuel tanks, fuel pumps, level sensors, and additive dosing systems. Its geographical segments are Europe and Africa, Asia Pacific, North America, and Latin America.

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