GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » ITT Inc (STU:2II) » Definitions » ROC %

ITT (STU:2II) ROC % : 14.58% (As of Dec. 2024)


View and export this data going back to . Start your Free Trial

What is ITT 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 %. ITT's annualized return on capital (ROC %) for the quarter that ended in Dec. 2024 was 14.58%.

As of today (2025-03-20), ITT's WACC % is 11.79%. ITT's ROC % is 14.36% (calculated using TTM income statement data). ITT 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.


ITT ROC % Historical Data

The historical data trend for ITT'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.

ITT ROC % Chart

ITT Annual Data
Trend Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23 Dec24
ROC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 8.29 9.81 14.32 14.73 15.36

ITT 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 Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 14.45 14.41 14.43 13.70 14.58

ITT ROC % Calculation

ITT'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 )
=600.409 * ( 1 - 19.43% )/( (2711.478 + 3585.929)/ 2 )
=483.7495313/3148.7035
=15.36 %

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))
=3606.194 - 446.12 - ( 448.596 - max(0, 951.663 - 1703.511+448.596))
=2711.478

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))
=4498.719 - 493.258 - ( 419.532 - max(0, 1273.206 - 1780.789+419.532))
=3585.929

ITT'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 )
=612.728 * ( 1 - 14.83% )/( (3574.538 + 3585.929)/ 2 )
=521.8604376/3580.2335
=14.58 %

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))
=4454.995 - 465.186 - ( 415.271 - max(0, 1148.505 - 1811.731+415.271))
=3574.538

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))
=4498.719 - 493.258 - ( 419.532 - max(0, 1273.206 - 1780.789+419.532))
=3585.929

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.


ITT  (STU:2II) 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, ITT's WACC % is 11.79%. ITT's ROC % is 14.36% (calculated using TTM income statement data). ITT 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.


ITT ROC % Related Terms

Thank you for viewing the detailed overview of ITT's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.


ITT Business Description

Traded in Other Exchanges
Address
100 Washington Boulevard, 6th Floor, Stamford, CT, USA, 06902
ITT Inc is a diversified manufacturer of engineered critical components and customized technology solutions predominantly for the transportation, industrial and energy markets. The company's products include, brake pads, shock absorbers, pumps, valves, connectors, switches and others. Its operating segments are; Motion Technologies (MT), Industrial Process (IP), and Connect & Control Technologies (CCT). The majority of the revenue is generated from the Motion Technologies segment which is a manufacturer of brake pads, shims, shock absorbers, energy absorption components and sealing technologies. Geographically, the company generates majority of the revenue from North America, and also has its presence in South America, Europe, Asia, Middle East and Africa.

ITT Headlines

No Headlines