Drake & Scull International PJSC (DFM:DSI) ROIC % : -0.83% (As of Mar. 2024)

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What is Drake & Scull International PJSC ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Drake & Scull International PJSC's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was -0.83%.

As of today (2024-06-22), Drake & Scull International PJSC's WACC % is 3.49%. Drake & Scull International PJSC's ROIC % is -3.84% (calculated using TTM income statement data). Drake & Scull International PJSC earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Drake & Scull International PJSC ROIC % Historical Data

The historical data trend for Drake & Scull International PJSC'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.

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Drake & Scull International PJSC ROIC % Chart

Drake & Scull International PJSC Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

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29.29

-3.18

-1.03

-1.48

-5.31

Drake & Scull International PJSC Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROIC %	Get a 7-Day Free Trial															-6.62	-0.44	-1.23	-12.89	-0.83

Competitive Comparison of Drake & Scull International PJSC's ROIC %

For the Engineering & Construction subindustry, Drake & Scull International PJSC'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.

Drake & Scull International PJSC's ROIC % Distribution in the Construction Industry

For the Construction industry and Industrials sector, Drake & Scull International PJSC's ROIC % distribution charts can be found below:

* The bar in red indicates where Drake & Scull International PJSC's ROIC % falls into.

Drake & Scull International PJSC ROIC % Calculation

Drake & Scull International PJSC's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROIC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	-218.434 * ( 1 - 0.04% )	/	( (3937.223	+	4283.619)	/ 2 )
=	-218.3466264	/	4110.421
=	-5.31 %

where

	Invested Capital		(A: Dec. 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	))
=	379.996	-	636.487	-	( 22.639	-	max(0, 4441.605	-	247.891	+	22.639	))
=	3937.223

	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	))
=	356.098	-	603.784	-	( 28.576	-	max(0, 4769.106	-	237.801	+	28.576	))
=	4283.619

Drake & Scull International PJSC's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROIC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	-39.268 * ( 1 - 9.02% )	/	( (4283.619	+	4322.708)	/ 2 )
=	-35.7260264	/	4303.1635
=	-0.83 %

where

	Invested Capital		(Q: 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	))
=	356.098	-	603.784	-	( 28.576	-	max(0, 4769.106	-	237.801	+	28.576	))
=	4283.619

	Invested Capital		(Q: Mar. 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	))
=	358.833	-	612.934	-	( 75.651	-	max(0, 4814.43	-	237.621	+	75.651	))
=	4322.708

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

Drake & Scull International PJSC (DFM:DSI) 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, Drake & Scull International PJSC's WACC % is 3.49%. Drake & Scull International PJSC's ROIC % is -3.84% (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.

Drake & Scull International PJSC ROIC % Related Terms

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Drake & Scull International PJSC (DFM:DSI) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Construction » Drake & Scull International PJSC (DFM:DSI) » Definitions » ROIC %

Traded in Other Exchanges

N/A

Address

International Media Production Zone, P.O. Box 65794, Dubai, ARE

Website

https://www.drakescull.com

Drake & Scull International PJSC is engaged in carrying out contracting work relating to the construction industry, such as electrical, plumbing, oil and gas, air conditioning and sanitation work in the Middle East, Europe, Asia and North Africa region. The company is organized into business units based on its services and has three reportable business segments, namely, Engineering (Mechanical, Electrical and Plumbing) and Others. The company is geographically distributed in the UAE and Others. The company is presently engaged in carrying out contracting work relating to the construction industry in the United Arab Emirates, Kuwait, Egypt, Germany, Algeria, India, Iraq and Jordan.