ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Corticeira Amorim SGPS's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was 5.37%.
As of today (2024-12-12), Corticeira Amorim SGPS's WACC % is 5.08%. Corticeira Amorim SGPS's ROIC % is 7.03% (calculated using TTM income statement data).
Corticeira Amorim SGPS generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.
* 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.
Competitive Comparison of Corticeira Amorim SGPS's ROIC %
For the Lumber & Wood Production subindustry, Corticeira Amorim SGPS'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.
Corticeira Amorim SGPS's ROIC % Distribution in the Forest Products Industry
For the Forest Products industry and Basic Materials sector, Corticeira Amorim SGPS's ROIC % distribution charts can be found below:
* The bar in red indicates where Corticeira Amorim SGPS's ROIC % falls into.
Corticeira Amorim SGPS ROIC % Calculation
Corticeira Amorim SGPS's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:
Note:
The Operating Income 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.
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, Corticeira Amorim SGPS's WACC % is 5.08%. Corticeira Amorim SGPS's ROIC % is 7.03% (calculated using TTM income statement data).
Corticeira Amorim SGPS generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.
Corticeira Amorim SGPS 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.
Corticeira Amorim SGPS ROIC % Related Terms
Thank you for viewing the detailed overview of Corticeira Amorim SGPS's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Corticeira Amorim SGPS SA (Corticeira Amorim) is a holding company engaged in cork-related products. Group organizes its activities into five business divisions: Raw Materials, Cork Stoppers, Floor and wall Coverings, Cork Composites, and Insulation Cork. The company's products include stoppers for wine and other spirits, granulated cork, rubber cork, cork floorings and giftware. The business of the company is operated through Portugal, Spain, Tunisia, the United States, Australia, Germany, China, Italy, Argentina, France and Netherlands. The company derives majority of the revenue from European region.
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