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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. MGP Ingredients's annualized return on capital (ROC %) for the quarter that ended in Dec. 2024 was 17.30%.
As of today (2025-03-14), MGP Ingredients's WACC % is 5.33%. MGP Ingredients's ROC % is 6.31% (calculated using TTM income statement data). MGP Ingredients 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.
The historical data trend for MGP Ingredients'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.
MGP Ingredients Annual Data | |||||||||||||||||||||
Trend | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | Dec24 | |||||||||||
ROC % | Get a 7-Day Free Trial |
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14.31 | 13.34 | 11.81 | 11.51 | 6.41 |
MGP Ingredients Quarterly Data | ||||||||||||||||||||
Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | Jun24 | Sep24 | Dec24 | |
ROC % | Get a 7-Day Free Trial |
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11.29 | 7.89 | 11.28 | 8.84 | 17.30 |
MGP Ingredients's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2024 is calculated as:
ROC % (A: Dec. 2024 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (A: Dec. 2023 ) | + | Invested Capital (A: Dec. 2024 )) | / count ) |
= | 164.418 * ( 1 - 49.64% ) | / | ( (1279.416 | + | 1302.19) | / 2 ) |
= | 82.8009048 | / | 1290.803 | |||
= | 6.41 % |
where
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 | )) |
= | 1392.348 | - | 94.544 | - | ( 18.388 | - | max(0, 114.106 | - | 514.297 | + | 18.388 | )) |
= | 1279.416 |
Invested Capital | (A: Dec. 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 | )) |
= | 1405.785 | - | 78.322 | - | ( 25.273 | - | max(0, 92.45 | - | 546.136 | + | 25.273 | )) |
= | 1302.19 |
MGP Ingredients's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2024 is calculated as:
ROC % (Q: Dec. 2024 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Sep. 2024 ) | + | Invested Capital (Q: Dec. 2024 )) | / count ) |
= | 174.052 * ( 1 - -31.47% ) | / | ( (1343.909 | + | 1302.19) | / 2 ) |
= | 228.8261644 | / | 1323.0495 | |||
= | 17.30 % |
where
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 | )) |
= | 1440.619 | - | 75.938 | - | ( 20.772 | - | max(0, 82.338 | - | 532.008 | + | 20.772 | )) |
= | 1343.909 |
Invested Capital | (Q: Dec. 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 | )) |
= | 1405.785 | - | 78.322 | - | ( 25.273 | - | max(0, 92.45 | - | 546.136 | + | 25.273 | )) |
= | 1302.19 |
Note: The Operating Income data used here is four times the quarterly (Dec. 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.
MGP Ingredients (NAS:MGPI) 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, MGP Ingredients's WACC % is 5.33%. MGP Ingredients's ROC % is 6.31% (calculated using TTM income statement data). MGP Ingredients 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.
Thank you for viewing the detailed overview of MGP Ingredients's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Karen Seaberg | director | 20073 266TH ROAD, #266, ATCHISON KS 66002 |
Mingus Lori L.s. | director | 4123 HWY 49, PERRY KS 66073 |
Donn S. Lux | director, 10 percent owner, other: Member of 10% holder group | 5050 KEMPER AVENUE, ST. LOUIS MO 63139 |
Erika Lapish | officer: Vice President | 100 COMMERCIAL STREET, P.O. BOX 130, ATCHISON KS 66002 |
Brandon Gall | officer: VP and Chief Financial Officer | 6142 REINHARDT, FAIRWAY KS 66205 |
David Colo | director | C/O DIAMOND FOODS, INC., 600 MONTGOMERY STREET, 13TH FLOOR, SAN FRANCISCO CA 94111 |
Catherine N. Lux | 10 percent owner, other: Member of 10% holder group | 5050 KEMPER AVENUE, ST. LOUIS MO 63139 |
Cnl 2013 Irrevocable Trust Dated April 2, 2013 | 10 percent owner, other: Member of 10% holder group | 212 S. MAIN AVENUE, SUITE 145, SIOUX FALLS SD 57104 |
Ann S. Lux 2005 Irrevocable Trust Fbo Paul S. Lux Dated September 16, 2005 | 10 percent owner, other: Member of 10% holder group | 5050 KEMPER AVENUE, ST. LOUIS MO 63169 |
Paul S. Lux | 10 percent owner, other: Member of 10% holder group | 5050 KEMPER AVENUE, ST. LOUIS MO 63139 |
Caroline Lux Kaplan | 10 percent owner, other: Member of 10% holder group | 5050 KEMPER AVENUE, ST. LOUIS MO 63139 |
Caroline L. Kaplan Revocable Trust Dated December 16, 2009 | 10 percent owner, other: Member of 10% holder group | 5050 KEMPER AVENUE, ST. LOUIS MO 63139 |
Luxco 2017 Irrevocable Trust Dated June 19, 2017 | 10 percent owner | 5050 KEMPER AVENUE, ST. LOUIS MO 63139 |
Neha J Clark | director | C/O LIFEWAY FOODS, 6431 OAKTON STREET, MORTON GROVE IL 60053 |
Kevin Rauckman | director | 1200 E 151 ST ST, OLATHE KS 66062 |
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