Active Risk Group (LSE:ARI) ROIC % : 57.60% (As of Mar. 2013)

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What is Active Risk Group 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 %. Active Risk Group's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2013 was 57.60%.

As of today (2024-05-16), Active Risk Group's WACC % is 0.00%. Active Risk Group's ROIC % is 0.00% (calculated using TTM income statement data). Active Risk Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Active Risk Group ROIC % Historical Data

The historical data trend for Active Risk Group'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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Active Risk Group ROIC % Chart

Active Risk Group Annual Data

Trend

Mar04

Mar05

Mar06

Mar07

Mar08

Mar09

Mar10

Mar11

Mar12

Mar13

ROIC %

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-122.12

-50.63

93.01

-93.16

-7.42

Active Risk Group Semi-Annual Data
	Sep04	Mar05	Sep05	Mar06	Sep06	Mar07	Sep07	Mar08	Sep08	Mar09	Sep09	Mar10	Sep10	Mar11	Sep11	Mar12	Sep12	Mar13
ROIC %	Get a 7-Day Free Trial													416.07	-286.96	-130.65	-86.97	57.60

Competitive Comparison of Active Risk Group's ROIC %

For the Software - Application subindustry, Active Risk Group'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.

Active Risk Group's ROIC % Distribution in the Software Industry

For the Software industry and Technology sector, Active Risk Group's ROIC % distribution charts can be found below:

* The bar in red indicates where Active Risk Group's ROIC % falls into.

Active Risk Group ROIC % Calculation

Active Risk Group's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Mar. 2013 is calculated as:

	ROIC % (A: Mar. 2013 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2012 )	+	Invested Capital (A: Mar. 2013 ))	/ count )
=	-0.51 * ( 1 - 53.51% )	/	( (3.178	+	3.215)	/ 2 )
=	-0.237099	/	3.1965
=	-7.42 %

where

	Invested Capital		(A: Mar. 2012 )
=	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	))
=	5.778	-	0.745	-	( 3.343	-	max(0, 3.625	-	5.48	+	3.343	))
=	3.178

	Invested Capital		(A: Mar. 2013 )
=	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	))
=	5.767	-	0.783	-	( 2.745	-	max(0, 3.808	-	5.577	+	2.745	))
=	3.215

Active Risk Group's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Mar. 2013 is calculated as:

	ROIC % (Q: Mar. 2013 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2012 )	+	Invested Capital (Q: Mar. 2013 ))	/ count )
=	0.59 * ( 1 - -69.44% )	/	( (0.256	+	3.215)	/ 2 )
=	0.999696	/	1.7355
=	57.60 %

where

	Invested Capital		(Q: Sep. 2012 )
=	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	))
=	4.34	-	2.888	-	( 2.342	-	max(0, 2.888	-	4.084	+	2.342	))
=	0.256

	Invested Capital		(Q: Mar. 2013 )
=	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	))
=	5.767	-	0.783	-	( 2.745	-	max(0, 3.808	-	5.577	+	2.745	))
=	3.215

Note: The Operating Income data used here is two times the semi-annual (Mar. 2013) data.

Active Risk Group (LSE:ARI) 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, Active Risk Group's WACC % is 0.00%. Active Risk Group's ROIC % is 0.00% (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.

Active Risk Group ROIC % Related Terms

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