Health Italia SpA (MIL:HI) ROIC % : 1.74% (As of Dec. 2023)

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What is Health Italia 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 %. Health Italia SpA's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 1.74%.

As of today (2024-05-03), Health Italia SpA's WACC % is 1.43%. Health Italia SpA's ROIC % is 6.02% (calculated using TTM income statement data). Health Italia SpA 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.

Health Italia SpA ROIC % Historical Data

The historical data trend for Health Italia 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.

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Health Italia SpA ROIC % Chart

Health Italia SpA Annual Data

Trend

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

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0.03

7.28

4.41

10.48

6.00

Health Italia SpA Semi-Annual Data
	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROIC %	Get a 7-Day Free Trial												6.93	11.52	9.18	7.17	1.74

Competitive Comparison of Health Italia SpA's ROIC %

For the Healthcare Plans subindustry, Health Italia 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.

Health Italia SpA's ROIC % Distribution in the Healthcare Plans Industry

For the Healthcare Plans industry and Healthcare sector, Health Italia SpA's ROIC % distribution charts can be found below:

* The bar in red indicates where Health Italia SpA's ROIC % falls into.

Health Italia SpA ROIC % Calculation

Health Italia SpA's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROIC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	5.768 * ( 1 - 49.17% )	/	( (49.192	+	48.475)	/ 2 )
=	2.9318744	/	48.8335
=	6.00 %

where

	Invested Capital		(A: Dec. 2022 )
=	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	))
=	71.457	-	18.287	-	( 3.978	-	max(0, 31.704	-	40.464	+	3.978	))
=	49.192

	Invested Capital		(A: 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	))
=	67.443	-	17.891	-	( 1.077	-	max(0, 20.482	-	53.403	+	1.077	))
=	48.475

Health Italia SpA'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 )
=	6.724 * ( 1 - 87.43% )	/	( (48.43	+	48.475)	/ 2 )
=	0.8452068	/	48.4525
=	1.74 %

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	))
=	68.357	-	15.483	-	( 4.444	-	max(0, 23.844	-	55.46	+	4.444	))
=	48.43

	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	))
=	67.443	-	17.891	-	( 1.077	-	max(0, 20.482	-	53.403	+	1.077	))
=	48.475

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

Health Italia SpA (MIL:HI) 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, Health Italia SpA's WACC % is 1.43%. Health Italia SpA's ROIC % is 6.02% (calculated using TTM income statement data). Health Italia SpA 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. Health Italia SpA 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.

Health Italia SpA ROIC % Related Terms

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Health Italia SpA (MIL:HI) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Healthcare Plans » Health Italia SpA (MIL:HI) » Definitions » ROIC %

Comparable Companies

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6I5:Germany

Address

Via di Santa Cornelia, 9, Formello, ITA, 00060

Website

http://www.healthitalia.it

Health Italia SpA is an Italy based company engaged in offering integrated healthcare services. It operates in the promotion of integrated and alternative healthcare solutions and provides administrative, liquidation, information technology and consulting services for health funds, health care funds and mutual-aid companies. In addition, the group is also active in the corporate welfare market and manages outsourced flexible benefit welfare plans.