Fos SpA (MIL:FOS) ROC % : 8.65% (As of Jun. 2023)

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What is Fos 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 %. Fos SpA's annualized return on capital (ROC %) for the quarter that ended in Jun. 2023 was 8.65%.

As of today (2024-06-10), Fos SpA's WACC % is 4.73%. Fos SpA's ROC % is 15.18% (calculated using TTM income statement data). Fos SpA 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.

Fos SpA ROC % Historical Data

The historical data trend for Fos 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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Fos SpA ROC % Chart

Fos SpA Annual Data

Trend

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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9.62

9.83

9.60

9.15

41.34

Fos SpA Semi-Annual Data
	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial								10.00	9.31	10.28	8.65	25.21

Fos SpA ROC % Calculation

Fos SpA's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2022 is calculated as:

	ROC % (A: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2021 )	+	Invested Capital (A: Dec. 2022 ))	/ count )
=	2.195 * ( 1 - 33.96% )	/	( (12.701	+	18.998)	/ 2 )
=	1.449578	/	15.8495
=	9.15 %

where

	Invested Capital		(A: Dec. 2021 )
=	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	))
=	24.545	-	3.691	-	( 8.153	-	max(0, 7.19	-	17.975	+	8.153	))
=	12.701

	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	))
=	34.636	-	5.97	-	( 9.668	-	max(0, 13.144	-	24.183	+	9.668	))
=	18.998

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

	ROC % (Q: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2022 )	+	Invested Capital (Q: Jun. 2023 ))	/ count )
=	2.92 * ( 1 - 41.2% )	/	( (18.998	+	20.69)	/ 2 )
=	1.71696	/	19.844
=	8.65 %

where

	Invested Capital		(Q: 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	))
=	34.636	-	5.97	-	( 9.668	-	max(0, 13.144	-	24.183	+	9.668	))
=	18.998

	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	))
=	34.763	-	4.867	-	( 9.206	-	max(0, 13.147	-	24.028	+	9.206	))
=	20.69

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

Fos SpA (MIL:FOS) 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, Fos SpA's WACC % is 4.73%. Fos SpA's ROC % is 15.18% (calculated using TTM income statement data). Fos SpA 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.

Fos SpA ROC % Related Terms

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Fos SpA (MIL:FOS) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Fos SpA (MIL:FOS) » Definitions » ROC %

Comparable Companies

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Address

Via Milano 166 N/r, Genova, ITA, 16126

Website

http://www.gruppofos.it

Fos SpA is an Italian technological industry offering services of system integration and software development, applicative and infrastructural outsourcing, research activities, development and prototyping of innovative technological solutions, services for the telecommunications. The company's services are provided both in as a service mode for the maintenance of systems and new developments at the customer's premises, and through the design and realisation of tailored on demand solutions (software applications, db and systemic assistance, cyber security, cloud computing, digital workspace and hardware supply).

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