ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Sandoz Group AG's annualized return on capital (ROC %) for the quarter that ended in Jun. 2024 was 3.04%.
As of today (2024-12-12), Sandoz Group AG's WACC % is 5.73%. Sandoz Group AG's ROC % is 1.32% (calculated using TTM income statement data).
Sandoz Group AG earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Sandoz Group AG ROC % Historical Data
The historical data trend for Sandoz Group AG'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.
* Premium members only.
Sandoz Group AG ROC % Chart
Sandoz Group AG Annual Data
Trend
Dec22
Dec23
ROC %
5.40
1.37
Sandoz Group AG Semi-Annual Data
Dec22
Jun23
Dec23
Jun24
ROC %
-
3.40
-0.74
3.04
Sandoz Group AG ROC % Calculation
Sandoz Group AG's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:
Note:
The Operating Income data used here is two times the semi-annual (Jun. 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.
Sandoz Group AG (OTCPK:SDZNY) 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, Sandoz Group AG's WACC % is 5.73%. Sandoz Group AG's ROC % is 1.32% (calculated using TTM income statement data).
Sandoz Group AG 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.
Sandoz Group AG ROC % Related Terms
Thank you for viewing the detailed overview of Sandoz Group AG's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Sandoz is one of the largest generic pharmaceutical manufacturers in the world, generating over $9 billion annually from off-patent drugs. Once part of Novartis, Sandoz spun off and went public in October 2023. Generics, including small molecules and complex injectables, make up roughly 75% of Sandoz's total sales, and the firm has a significant presence in Europe, the United States, and other key international markets. Sandoz generates its remaining sales from biosimilars and is among leaders in the space. Sandoz launched Europe's first biosimilar, Omnitrope, in 2006 as well as the first US biosimilar, Zarxio, in 2015. It currently has eight commercialized biosimilars in a number of markets and has over 20 assets in its pipeline.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
SDZNY has been successfully added to your