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Danieli & C. Officine Meccaniche SpA (MIL:DAN) ROIC % : 7.06% (As of Jun. 2024)


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What is Danieli & C. Officine Meccaniche SpA 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 %. Danieli & C. Officine Meccaniche SpA's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2024 was 7.06%.

As of today (2024-12-14), Danieli & C. Officine Meccaniche SpA's WACC % is 8.39%. Danieli & C. Officine Meccaniche SpA's ROIC % is 5.89% (calculated using TTM income statement data). Danieli & C. Officine Meccaniche SpA earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Danieli & C. Officine Meccaniche SpA ROIC % Historical Data

The historical data trend for Danieli & C. Officine Meccaniche SpA'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.

Danieli & C. Officine Meccaniche SpA ROIC % Chart

Danieli & C. Officine Meccaniche SpA Annual Data
Trend Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Jun22 Jun23 Jun24
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 2.91 -0.60 -1.01 7.56 5.91

Danieli & C. Officine Meccaniche SpA Semi-Annual Data
Dec14 Jun15 Dec15 Jun16 Dec16 Jun17 Dec17 Jun18 Dec18 Jun19 Dec19 Jun20 Dec20 Jun21 Dec21 Jun22 Dec22 Jun23 Dec23 Jun24
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 -4.98 4.40 10.25 4.59 7.06

Competitive Comparison of Danieli & C. Officine Meccaniche SpA's ROIC %

For the Specialty Industrial Machinery subindustry, Danieli & C. Officine Meccaniche SpA'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.


Danieli & C. Officine Meccaniche SpA's ROIC % Distribution in the Industrial Products Industry

For the Industrial Products industry and Industrials sector, Danieli & C. Officine Meccaniche SpA's ROIC % distribution charts can be found below:

* The bar in red indicates where Danieli & C. Officine Meccaniche SpA's ROIC % falls into.



Danieli & C. Officine Meccaniche SpA ROIC % Calculation

Danieli & C. Officine Meccaniche SpA's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jun. 2024 is calculated as:

ROIC % (A: Jun. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Jun. 2023 ) + Invested Capital (A: Jun. 2024 ))/ count )
=287.319 * ( 1 - 22.7% )/( (3492.963 + 4022.165)/ 2 )
=222.097587/3757.564
=5.91 %

where

Invested Capital(A: 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))
=6540.936 - 1577.031 - ( 2209.243 - max(0, 3745.346 - 5216.288+2209.243))
=3492.963

Invested Capital(A: Jun. 2024 )
=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))
=7493.775 - 1686.71 - ( 2624.022 - max(0, 4215.942 - 6000.842+2624.022))
=4022.165

Danieli & C. Officine Meccaniche SpA's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2024 is calculated as:

ROIC % (Q: Jun. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Dec. 2023 ) + Invested Capital (Q: Jun. 2024 ))/ count )
=369.686 * ( 1 - 25.34% )/( (3798.459 + 4022.165)/ 2 )
=276.0075676/3910.312
=7.06 %

where

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))
=7205.149 - 1612.05 - ( 2594.671 - max(0, 4057.21 - 5851.85+2594.671))
=3798.459

Invested Capital(Q: Jun. 2024 )
=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))
=7493.775 - 1686.71 - ( 2624.022 - max(0, 4215.942 - 6000.842+2624.022))
=4022.165

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


Danieli & C. Officine Meccaniche SpA  (MIL:DAN) 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, Danieli & C. Officine Meccaniche SpA's WACC % is 8.39%. Danieli & C. Officine Meccaniche SpA's ROIC % is 5.89% (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.


Danieli & C. Officine Meccaniche SpA ROIC % Related Terms

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Danieli & C. Officine Meccaniche SpA Business Description

Address
Via Nazionale 41, Buttrio, Udine, ITA, 33042
Danieli & C. Officine Meccaniche SpA is an Italy-based company that is engaged in manufacturing and distribution of steel and other nonferrous metal products as well as plant building. The company operates through two segments, namely steelmaking and plant making. The Steelmaking segment manufactures ingots, forged bars, blooms, rolled bars, bar in coils and others. End customers primarily come from the mechanical, automotive, oil & gas, power generation and other sectors. The Plant Making segment designs and builds mines, pellet production plants, furnaces, rolling mills and other various plants and facilities. The company has a global presence, with Europe, Middle East and Far East being the three largest markets for the company.