ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Calgro M3 Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Feb. 2024 was 9.41%.
As of today (2024-06-21), Calgro M3 Holdings's WACC % is 8.08%. Calgro M3 Holdings's ROIC % is 8.18% (calculated using TTM income statement data).
Calgro M3 Holdings 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.
Calgro M3 Holdings ROIC % Historical Data
The historical data trend for Calgro M3 Holdings'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.
Competitive Comparison of Calgro M3 Holdings's ROIC %
For the Residential Construction subindustry, Calgro M3 Holdings'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.
Calgro M3 Holdings's ROIC % Distribution in the Homebuilding & Construction Industry
For the Homebuilding & Construction industry and Consumer Cyclical sector, Calgro M3 Holdings's ROIC % distribution charts can be found below:
* The bar in red indicates where Calgro M3 Holdings's ROIC % falls into.
Calgro M3 Holdings ROIC % Calculation
Calgro M3 Holdings's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Feb. 2024 is calculated as:
Note:
The Operating Income data used here is two times the semi-annual (Feb. 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.
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, Calgro M3 Holdings's WACC % is 8.08%. Calgro M3 Holdings's ROIC % is 8.18% (calculated using TTM income statement data).
Calgro M3 Holdings 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.
Calgro M3 Holdings 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 %, 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.
Calgro M3 Holdings ROIC % Related Terms
Thank you for viewing the detailed overview of Calgro M3 Holdings's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Calgro M3 Holdings (Calgro M3 Holdings) Business Description
Calgro M3 Holdings Ltd is a South Africa based company engaged in residential property and memorial parks development. It focuses on the lower end of the market and is engaged in large-scale integrated mixed-use projects and supply of rental investments. The group has two operating segments, namely Residential property development; and Memorial Parks. Residential Property development consists of infrastructure development, marketing and sales, construction, and handover to the client. Memorial Parks consists of activities such as land development, burial rights, maintenance services and others. The Residential property development segment constitutes majorly to the total revenue of the company.
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