ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. ASTM SpA's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2021 was -2.38%.
As of today (2024-06-23), ASTM SpA's WACC % is 2.17%. ASTM SpA's ROIC % is 1.71% (calculated using TTM income statement data).
ASTM SpA earns returns that do not match up to its cost of capital. It will destroy value as it grows.
ASTM SpA ROIC % Historical Data
The historical data trend for ASTM SpA's ROIC % 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.
For the Engineering & Construction subindustry, ASTM SpA's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
ASTM SpA's ROIC % Distribution in the Construction Industry
For the Construction industry and Industrials sector, ASTM SpA's ROIC % distribution charts can be found below:
* The bar in red indicates where ASTM SpA's ROIC % falls into.
ASTM SpA ROIC % Calculation
ASTM SpA's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2021 is calculated as:
Note:
The Operating Income data used here is two times the semi-annual (Dec. 2021) 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.
ASTM SpA (OTCPK:ADARY) ROIC % Explanation
ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 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 ROIC % 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, ASTM SpA's WACC % is 2.17%. ASTM SpA's ROIC % is 1.71% (calculated using TTM income statement data).
Be Aware
Like ROE % and ROA %, ROIC % 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.
ASTM SpA ROIC % Related Terms
Thank you for viewing the detailed overview of ASTM SpA's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
ASTM SpA is an industrial holding company that manages licensed motorways, large infrastructure works, and construction projects. It designs, develops, and maintains roads, airports, and other infrastructure projects. The company works as a contractor and helps establish new project finance initiatives. ASTM is organized into two main segments. The Motorway Sector operations collects revenue from completed road works through tolls. These are generally multi-decade concessions with municipal governments. The vast majority of these are in Italy and Brazil. The Engineering, Procurement, and Construction (EPC) segment provides design and construction services to infrastructure and civil projects across the globe.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
ADARY has been successfully added to your 