Ford Motor Co (NEOE:F) ROC % : 1.52% (As of Sep. 2024)

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What is Ford Motor Co 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 %. Ford Motor Co's annualized return on capital (ROC %) for the quarter that ended in Sep. 2024 was 1.52%.

As of today (2024-12-12), Ford Motor Co's WACC % is 4.10%. Ford Motor Co's ROC % is 1.89% (calculated using TTM income statement data). Ford Motor Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Ford Motor Co ROC % Historical Data

The historical data trend for Ford Motor Co'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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Ford Motor Co ROC % Chart

Ford Motor Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-0.03

-2.23

2.07

2.17

2.72

Ford Motor Co Quarterly Data
	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROC %	Get a 7-Day Free Trial															1.77	-0.12	1.79	2.47	1.52

Ford Motor Co ROC % Calculation

Ford Motor Co'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 )
=	7322.453 * ( 1 - -9.13% )	/	( (284923.639	+	303394.79)	/ 2 )
=	7990.9929589	/	294159.2145
=	2.72 %

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	))
=	347618.414	-	36054.59	-	( 59869.095	-	max(0, 131592.461	-	158232.646	+	59869.095	))
=	284923.639

	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	))
=	366672.696	-	36512.986	-	( 53893.414	-	max(0, 136213.99	-	162978.91	+	53893.414	))
=	303394.79

Ford Motor Co's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2024 is calculated as:

	ROC % (Q: Sep. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2024 )	+	Invested Capital (Q: Sep. 2024 ))	/ count )
=	4768.192 * ( 1 - -3.11% )	/	( (318919.461	+	328084.121)	/ 2 )
=	4916.4827712	/	323501.791
=	1.52 %

where

	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	))
=	379061.113	-	36685.544	-	( 47372.703	-	max(0, 141713.811	-	165169.919	+	47372.703	))
=	318919.461

	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	))
=	388833.866	-	38990.806	-	( 49991.513	-	max(0, 147700.166	-	169459.105	+	49991.513	))
=	328084.121

Note: The Operating Income data used here is four times the quarterly (Sep. 2024) data.

Ford Motor Co (NEOE:F) 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, Ford Motor Co's WACC % is 4.10%. Ford Motor Co's ROC % is 1.89% (calculated using TTM income statement data). Ford Motor Co 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.

Ford Motor Co ROC % Related Terms

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Ford Motor Co Business Description

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Address

One American Road, Dearborn, MI, USA, 48126

Website

https://www.ford.com

Ford Motor Co. manufactures automobiles under its Ford and Lincoln brands. In March 2022, the company announced that it will run its combustion engine business, Ford Blue, and its BEV business, Ford Model e, as separate businesses but still all under Ford Motor. The company has nearly 13% market share in the United States, about 11% share in the UK, and under 2% share in China including unconsolidated affiliates. Sales in the US made up about 66% of 2023 total company revenue. Ford has about 177,000 employees, including about 59,000 UAW employees, and is based in Dearborn, Michigan.