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Ameriprise Financial (FRA:A4S) ROIC % : 1.33% (As of Sep. 2024)


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What is Ameriprise Financial 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 %. Ameriprise Financial's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was 1.33%.

As of today (2024-12-15), Ameriprise Financial's WACC % is 11.11%. Ameriprise Financial's ROIC % is 1.78% (calculated using TTM income statement data). Ameriprise Financial earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Ameriprise Financial ROIC % Historical Data

The historical data trend for Ameriprise Financial'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.

* Premium members only.

Ameriprise Financial ROIC % Chart

Ameriprise Financial Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 1.50 1.05 2.28 2.16 1.76

Ameriprise Financial Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
ROIC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.39 1.09 2.52 2.11 1.33

Competitive Comparison of Ameriprise Financial's ROIC %

For the Asset Management subindustry, Ameriprise Financial'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.


Ameriprise Financial's ROIC % Distribution in the Asset Management Industry

For the Asset Management industry and Financial Services sector, Ameriprise Financial's ROIC % distribution charts can be found below:

* The bar in red indicates where Ameriprise Financial's ROIC % falls into.



Ameriprise Financial ROIC % Calculation

Ameriprise Financial'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
=EBIT * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2022 ) + Invested Capital (A: Dec. 2023 ))/ count )
=3262.686 * ( 1 - 20.96% )/( (141813.2496 + 152039.28775)/ 2 )
=2578.8270144/146926.268675
=1.76 %

where

Invested Capital(A: Dec. 2022 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Balance Sheet Cash And Cash Equivalents - 5% * Revenue )
=149956.288 - 2116.448 - ( 6699.568 - 5% * 13459.552 )
=141813.2496

Invested Capital(A: Dec. 2023 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Balance Sheet Cash And Cash Equivalents - 5% * Revenue )
=160650.147 - 2386.951 - ( 6936.188 - 5% * 14245.595 )
=152039.28775

Ameriprise Financial's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2024 is calculated as:

ROIC % (Q: Sep. 2024 )
=NOPAT/Average Invested Capital
=EBIT * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jun. 2024 ) + Invested Capital (Q: Sep. 2024 ))/ count )
=2638.128 * ( 1 - 20.78% )/( (157611.353 + 155790.87385)/ 2 )
=2089.9250016/156701.113425
=1.33 %

where

Invested Capital(Q: Jun. 2024 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Balance Sheet Cash And Cash Equivalents - 5% * Revenue )
=166941.3 - 2216.594 - ( 7309.372 - 5% * 3920.38 )
=157611.353

Invested Capital(Q: Sep. 2024 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Balance Sheet Cash And Cash Equivalents - 5% * Revenue )
=167558.069 - 2325.481 - ( 9639.799 - 5% * 3961.697 )
=155790.87385

Note: The EBIT data used here is four times the quarterly (Sep. 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.


Ameriprise Financial  (FRA:A4S) 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, Ameriprise Financial's WACC % is 11.11%. Ameriprise Financial's ROIC % is 1.78% (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.


Ameriprise Financial ROIC % Related Terms

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Ameriprise Financial Business Description

Address
1099 Ameriprise Financial Center, Minneapolis, MN, USA, 55474
Ameriprise Financial is a major player in the us market for asset and wealth management, with around $1.4 trillion in total assets under management and administration at the end of 2023. With about 10,000 advisors, Ameriprise has one of the largest branded advisor networks in the industry. About 80% of the company's revenue comes from its asset and wealth management segments. Ameriprise has reduced its exposure to insurance with the sale of its auto and home insurance business in 2019 and discontinuing the sale of proprietary fixed annuities in 2020.

Ameriprise Financial Headlines

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