Esi SpA (MIL:ESIGM) ROC % : -4.25% (As of Dec. 2023)

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What is Esi SpA 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 %. Esi SpA's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -4.25%.

As of today (2024-06-08), Esi SpA's WACC % is 6.23%. Esi SpA's ROC % is -5.30% (calculated using TTM income statement data). Esi SpA earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Esi SpA ROC % Historical Data

The historical data trend for Esi SpA'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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Esi SpA ROC % Chart

Esi SpA Annual Data

Trend

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

51.42

26.12

4.66

-475.00

-5.64

Esi SpA Semi-Annual Data
	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial				-6.51	6.60	5.25	-5.83	-4.25

Esi SpA ROC % Calculation

Esi SpA'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 )
=	-1.852 * ( 1 - 21.24% )	/	( (33.418	+	18.338)	/ 2 )
=	-1.4586352	/	25.878
=	-5.64 %

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	))
=	43.588	-	8.826	-	( 1.855	-	max(0, 39.198	-	40.542	+	1.855	))
=	33.418

	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	))
=	22.953	-	3.893	-	( 0.722	-	max(0, 19.382	-	20.565	+	0.722	))
=	18.338

Esi SpA's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-1.304 * ( 1 - 19.93% )	/	( (30.765	+	18.338)	/ 2 )
=	-1.0441128	/	24.5515
=	-4.25 %

where

	Invested Capital		(Q: Jun. 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	))
=	39.518	-	6.973	-	( 1.956	-	max(0, 35.168	-	36.948	+	1.956	))
=	30.765

	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	))
=	22.953	-	3.893	-	( 0.722	-	max(0, 19.382	-	20.565	+	0.722	))
=	18.338

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

Esi SpA (MIL:ESIGM) 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, Esi SpA's WACC % is 6.23%. Esi SpA's ROC % is -5.30% (calculated using TTM income statement data). Esi SpA 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.

Esi SpA ROC % Related Terms

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Esi SpA (MIL:ESIGM) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Consumer Packaged Goods » Esi SpA (MIL:ESIGM) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

Via delle Industrie 1, Albisola Superiore, Albissola Marina, ITA, 17012

Website

https://www.esi-spa.com

Esi SpA is a wellness and food supplement company. The company provides products for hair wellness, eye wellness, liver health, skincare, sleep disorders, weight control, oral hygiene, menopause; vitamins and minerals; and antioxidants.

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