ECDA (ECD Automotive Design) ROIC % : 2.47% (As of Jun. 2024)

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What is ECD Automotive Design 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 %. ECD Automotive Design's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2024 was 2.47%.

As of today (2025-03-15), ECD Automotive Design's WACC % is 12.61%. ECD Automotive Design's ROIC % is 5.10% (calculated using TTM income statement data). ECD Automotive Design earns returns that do not match up to its cost of capital. It will destroy value as it grows.

ECD Automotive Design ROIC % Historical Data

The historical data trend for ECD Automotive Design'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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ECD Automotive Design ROIC % Chart

ECD Automotive Design Annual Data

Trend

Dec21

Dec22

Dec23

ROIC %

-6.25

-16.35

-4.02

ECD Automotive Design Quarterly Data
	Dec21	Mar22	Jun22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24
ROIC %	Get a 7-Day Free Trial					-0.50	15.84	-	-2.67	2.47

Competitive Comparison of ECD Automotive Design's ROIC %

For the Auto Manufacturers subindustry, ECD Automotive Design'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.

ECD Automotive Design's ROIC % Distribution in the Vehicles & Parts Industry

For the Vehicles & Parts industry and Consumer Cyclical sector, ECD Automotive Design's ROIC % distribution charts can be found below:

* The bar in red indicates where ECD Automotive Design's ROIC % falls into.

ECD Automotive Design ROIC % Calculation

ECD Automotive Design'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 )
=	-1.536 * ( 1 - 41.55% )	/	( (22.308	+	22.337)	/ 2 )
=	-0.897792	/	22.3225
=	-4.02 %

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	))
=	16.958	-	1.116	-	( 3.515	-	max(0, 18.889	-	12.423	+	3.515	))
=	22.308

	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	))
=	23.368	-	2.989	-	( 8.134	-	max(0, 19.734	-	17.776	+	8.134	))
=	22.337

ECD Automotive Design's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2024 is calculated as:

	ROIC % (Q: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2024 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	0.472 * ( 1 - 1.07% )	/	( (19.168	+	18.718)	/ 2 )
=	0.4669496	/	18.943
=	2.47 %

where

	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	))
=	21.556	-	3.683	-	( 5.56	-	max(0, 18.116	-	16.821	+	5.56	))
=	19.168

	Invested Capital		(Q: Jun. 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	))
=	21.745	-	5.464	-	( 5.661	-	max(0, 18.728	-	16.291	+	5.661	))
=	18.718

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

ECD Automotive Design (NAS:ECDA) 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, ECD Automotive Design's WACC % is 12.61%. ECD Automotive Design's ROIC % is 5.10% (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.

ECD Automotive Design ROIC % Related Terms

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ECD Automotive Design Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » ECD Automotive Design Inc (NAS:ECDA) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

4930 Industrial Lane, Unit 107, Kissimmee, FL, USA, 34758

Website

https://www.ecdautodesign.com

ECD Automotive Design Inc is a custom-car builder in the Restomod sector with a focus on British classic motor vehicles of various models of both two-door and four-door styles. The company has established a facility geared towards producing the most customized Land Rovers with the highest quality of parts and the highest quality labor force building each vehicle. ECD restores Land Rovers Defenders, Land Rover Series IIA, the Range Rover Classic and the Jaguar E-Type. It upgrade any engine, including Chevrolet V8's, Land Rover V8's, Cummins diesel engines and new electric drivetrains, performing all the necessary body work, drivetrain selection and installation, every stitch in the interior, paint work, up to placement of the last nut and bolt.