Westminster Group (LSE:WSG) ROIC % : -2.37% (As of Dec. 2023)

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What is Westminster 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 %. Westminster Group's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was -2.37%.

As of today (2024-05-12), Westminster Group's WACC % is 22.65%. Westminster Group's ROIC % is -4.70% (calculated using TTM income statement data). Westminster Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Westminster Group ROIC % Historical Data

The historical data trend for Westminster 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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Westminster Group ROIC % Chart

Westminster Group Annual Data

Trend

Dec12

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

ROIC %

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-30.62

-9.37

-12.37

-13.49

-26.53

Westminster Group Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROIC %	Get a 7-Day Free Trial															-29.86	-21.83	21.49	-6.56	-2.37

Competitive Comparison of Westminster Group's ROIC %

For the Security & Protection Services subindustry, Westminster 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.

Westminster Group's ROIC % Distribution in the Business Services Industry

For the Business Services industry and Industrials sector, Westminster Group's ROIC % distribution charts can be found below:

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

Westminster Group ROIC % Calculation

Westminster Group's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2021 is calculated as:

	ROIC % (A: Dec. 2021 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2020 )	+	Invested Capital (A: Dec. 2021 ))	/ count )
=	-1.917 * ( 1 - -0.57% )	/	( (6.665	+	7.869)	/ 2 )
=	-1.9279269	/	7.267
=	-26.53 %

where

	Invested Capital		(A: Dec. 2020 )
=	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	))
=	9.496	-	0.688	-	( 2.143	-	max(0, 2.408	-	5.354	+	2.143	))
=	6.665

	Invested Capital		(A: Dec. 2021 )
=	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	))
=	9.322	-	0.509	-	( 0.944	-	max(0, 1.847	-	5.286	+	0.944	))
=	7.869

Westminster Group's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROIC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-0.158 * ( 1 - 0% )	/	( (7.52	+	5.825)	/ 2 )
=	-0.158	/	6.6725
=	-2.37 %

where

	Invested Capital		(Q: Jun. 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	))
=	9.52	-	1.946	-	( 0.054	-	max(0, 2.197	-	5.331	+	0.054	))
=	7.52

	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	))
=	7.442	-	1.808	-	( -0.191	-	max(0, 2.209	-	3.332	+	-0.191	))
=	5.825

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

Westminster Group (LSE:WSG) 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, Westminster Group's WACC % is 22.65%. Westminster Group's ROIC % is -4.70% (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.

Westminster Group ROIC % Related Terms

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Westminster Group (LSE:WSG) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Business Services » Westminster Group PLC (LSE:WSG) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

3W5:Germany

Address

Blacklocks Hill, Westminster House, Banbury, Oxfordshire, GBR, OX17 2BS

Website

https://www.wsg-corporate.com

Westminster Group PLC designs, supplies, and provides ongoing support for technology security solutions. The company's operating division includes managed services and technology segments. The company generates maximum revenue from the managed services segment. Geographically, the company derives a majority of its revenue from the Middle East and also has a presence in the United Kingdom and Europe, Africa, and the Rest of the World. The activities of the company include the design, supply, and ongoing support of technology security solutions, encompassing a wide range of surveillance, detection, tracking, and interception technologies and the provision of long-term managed services.