ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Union de Cervecerias Peruanas Backus & Johnston's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2018 was 54.76%.
Union de Cervecerias Peruanas Backus & Johnston (LIM:BACKUBC1) 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, Union de Cervecerias Peruanas Backus & Johnston's WACC % is 0.00%. Union de Cervecerias Peruanas Backus & Johnston's ROIC % is 0.00% (calculated using TTM income statement data).
Union de Cervecerias Peruanas Backus & Johnston 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.
Union de Cervecerias Peruanas Backus & Johnston ROIC % Related Terms
Union de Cervecerias Peruanas Backus & Johnston ROIC % Historical 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.
Union de Cervecerias Peruanas Backus & Johnston ROIC % Chart
Union de Cervecerias Peruanas Backus & Johnston Annual Data
* 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.
Union de Cervecerias Peruanas Backus & Johnston ROIC % vs Beverages - Alcoholic Industry
Note:
The Operating Income data used here is one times the annual (Dec. 2018) data.
The tax rate is limited to between 0% and 100%.
* 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.
Union de Cervecerias Peruanas Backus & Johnston (LIM:BACKUBC1) has a ROIC % of 54.76% as of Dec. 2018. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Union de Cervecerias Peruanas Backus & Johnston and its competitors.
Is Union de Cervecerias Peruanas Backus & Johnston's ROIC % too high?
Union de Cervecerias Peruanas Backus & Johnston's current ROIC % is 54.76%. The Beverages - Alcoholic industry median ROIC % is 4.70. Union de Cervecerias Peruanas Backus & Johnston's value of 54.76% is 1065.1% above this industry median. Overall, Union de Cervecerias Peruanas Backus & Johnston has a GF Score™ of 23/100, reflecting its overall financial health beyond just this single metric.
How does Union de Cervecerias Peruanas Backus & Johnston's ROIC % compare to competitors?
Union de Cervecerias Peruanas Backus & Johnston's ROIC % of 54.76% can be compared against companies in the Beverages - Alcoholic industry. The industry median ROIC % is 4.70. Union de Cervecerias Peruanas Backus & Johnston's value of 54.76% is 1065.1% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROIC % for a Beverages - Alcoholic company?
The median ROIC % among Beverages - Alcoholic companies is 4.70, based on 211 companies in the industry. Companies in the top quartile (top 25%) have a ROIC % significantly above this median, while those in the bottom quartile fall well below. However, ROIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Union de Cervecerias Peruanas Backus & Johnston's current ROIC % of 54.76% is 1065.1% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROIC % mean?
A high ROIC % can signal that a stock is expensive relative to its fundamentals. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Union de Cervecerias Peruanas Backus & Johnston and its competitors. For the Beverages - Alcoholic industry, the median ROIC % is 4.70 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Union de Cervecerias Peruanas Backus & Johnston's current ROIC % is 54.76%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Union de Cervecerias Peruanas Backus & Johnston stock overvalued right now?
Union de Cervecerias Peruanas Backus & Johnston (LIM:BACKUBC1) has a current ROIC % of 54.76%. The current ROIC % is 54.76% and 1065.1% above the Beverages - Alcoholic industry median of 4.70. Union de Cervecerias Peruanas Backus & Johnston's overall GF Score™ is 23/100. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROIC % calculated?
ROIC % is calculated from a company's financial statements. For Union de Cervecerias Peruanas Backus & Johnston (LIM:BACKUBC1), the current ROIC % is 54.76% as of Dec. 2018. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Union de Cervecerias Peruanas Backus & Johnston Business Description
Union de Cervecerias Peruanas Backus & Johnston SA is engaged in the business of production, packaging, sale, distribution, and all other types of business related to malted and malt beverages, non-alcoholic beverages, and carbonated waters. The company's main business also includes investment in securities of domestic and foreign companies; the exploitation of rural properties; the sale, processing, conservation, marketing, and export of agricultural products; and the provision of advisory services related to these products.
23GF Score
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