Gerresheimer AG (XTER:GXI) ROC % : 2.65% (As of Feb. 2024)

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What is Gerresheimer AG 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 %. Gerresheimer AG's annualized return on capital (ROC %) for the quarter that ended in Feb. 2024 was 2.65%.

As of today (2024-05-15), Gerresheimer AG's WACC % is 6.43%. Gerresheimer AG's ROC % is 5.42% (calculated using TTM income statement data). Gerresheimer AG earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Gerresheimer AG ROC % Historical Data

The historical data trend for Gerresheimer 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.

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Gerresheimer AG ROC % Chart

Gerresheimer AG Annual Data

Trend

Nov14

Nov15

Nov16

Nov17

Nov18

Nov19

Nov20

Nov21

Nov22

Nov23

ROC %

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1.03

4.66

4.95

4.64

5.17

Gerresheimer AG Quarterly Data
	May19	Aug19	Nov19	Feb20	May20	Aug20	Nov20	Feb21	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Feb23	May23	Aug23	Nov23	Feb24
ROC %	Get a 7-Day Free Trial															2.61	6.04	5.03	8.25	2.65

Gerresheimer AG ROC % Calculation

Gerresheimer AG's annualized Return on Capital (ROC %) for the fiscal year that ended in Nov. 2023 is calculated as:

	ROC % (A: Nov. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Nov. 2022 )	+	Invested Capital (A: Nov. 2023 ))	/ count )
=	229.46 * ( 1 - 28.28% )	/	( (3252.921	+	3114.892)	/ 2 )
=	164.568712	/	3183.9065
=	5.17 %

where

	Invested Capital		(A: Nov. 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	))
=	3354.293	-	392.666	-	( 124.834	-	max(0, 1101.431	-	810.137	+	124.834	))
=	3252.921

	Invested Capital		(A: Nov. 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	))
=	3429.139	-	422.639	-	( 136.751	-	max(0, 957.966	-	849.574	+	136.751	))
=	3114.892

Gerresheimer AG's annualized Return on Capital (ROC %) for the quarter that ended in Feb. 2024 is calculated as:

	ROC % (Q: Feb. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Nov. 2023 )	+	Invested Capital (Q: Feb. 2024 ))	/ count )
=	127.54 * ( 1 - 34% )	/	( (3114.892	+	3231.962)	/ 2 )
=	84.1764	/	3173.427
=	2.65 %

where

	Invested Capital		(Q: Nov. 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	))
=	3429.139	-	422.639	-	( 136.751	-	max(0, 957.966	-	849.574	+	136.751	))
=	3114.892

	Invested Capital		(Q: Feb. 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	))
=	3469.201	-	345.23	-	( 123.17	-	max(0, 973.199	-	865.208	+	123.17	))
=	3231.962

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

Gerresheimer AG (XTER:GXI) 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, Gerresheimer AG's WACC % is 6.43%. Gerresheimer AG's ROC % is 5.42% (calculated using TTM income statement data). Gerresheimer 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.

Gerresheimer AG ROC % Related Terms

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Gerresheimer AG (XTER:GXI) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Devices & Instruments » Gerresheimer AG (XTER:GXI) » Definitions » ROC %

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GXId:UK 0NTI:UK GXI:Germany GXI:Germany GXI:Germany GXI:Austria

Address

Klaus-Bungert-Strasse 4, Duesseldorf, NW, DEU, 40468

Website

https://www.gerresheimer.com

Gerresheimer AG provides medicine packaging, drug delivery devices, and solutions with a product range for pharma, health, well-being, and biotech. The firm operates in three segments: The plastics and devices segment consists of products for simple and safe drug delivery along with packaging for liquid and solid medicines, The primary packaging glass segment produces glass packaging products for the pharma and cosmetics industries also for food and beverage industry and The advanced technologies segment works on technical and digital solutions to improve the therapy outcome for patients. The company generates the majority of its revenue in Europe, with sales in Germany contributing the major proportion of any country.

Executives

Dietmar Siemssen	Board of Directors
Dr. Lukas Burkhardt	Board of Directors
Andrea Abt	Supervisory Board

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