ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Otofarma SpA's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2024 was 13.38%.
As of today (2026-06-29), Otofarma SpA's WACC % is 9.10%. Otofarma SpA's ROIC % is 13.38% (calculated using TTM income statement data).
Otofarma 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.
Otofarma SpA (MIL:OTO) 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, Otofarma SpA's WACC % is 9.10%. Otofarma SpA's ROIC % is 13.38% (calculated using TTM income statement data).
Otofarma 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.
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.
Otofarma SpA ROIC % Related Terms
Otofarma SpA ROIC % Historical Data
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The historical data trend for Otofarma 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.
Otofarma SpA ROIC % Chart
Otofarma SpA Annual Data
Trend
Dec23
Dec24
ROIC %
9.80
13.38
Otofarma SpA Semi-Annual Data
Dec23
Dec24
ROIC %
9.80
13.38
MIL:OTO vs ABT, SYK, MDT: ROIC % Comparison
For the Medical Devices subindustry, Otofarma 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.
Otofarma SpA ROIC % vs Medical Devices & Instruments Industry
For the Medical Devices & Instruments industry and Healthcare sector, Otofarma SpA's ROIC % distribution charts can be found below:
* The bar in red indicates where Otofarma SpA's ROIC % falls into.
Note:
The Operating Income data used here is one times the annual (Dec. 2024) data.
The tax rate is limited to between 0% and 100%.
* 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.
Otofarma SpA (MIL:OTO) has a ROIC % of 13.38% as of Dec. 2024. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Otofarma SpA and its competitors.
Is Otofarma SpA's ROIC % too high?
Otofarma SpA's current ROIC % is 13.38%. The Medical Devices & Instruments industry median ROIC % is 1.25. Otofarma SpA's value of 13.38% is 970.4% above this industry median. Overall, Otofarma SpA has a GF Score™ of 16/100, reflecting its overall financial health beyond just this single metric.
How does Otofarma SpA's ROIC % compare to ABT and SYK?
Otofarma SpA's ROIC % of 13.38% can be compared against companies in the Medical Devices & Instruments industry. The industry median ROIC % is 1.25. Otofarma SpA's value of 13.38% is 970.4% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROIC % for a Medical Devices & Instruments company?
The median ROIC % among Medical Devices & Instruments companies is 1.25, based on 847 companies in the industry. Companies in the top quartile (top 25%) have a ROIC % significantly above this median, while those in the bottom quartile fall well below. However, ROIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Otofarma SpA's current ROIC % of 13.38% is 970.4% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROIC % mean?
A high ROIC % can signal that a stock is expensive relative to its fundamentals. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Otofarma SpA and its competitors. For the Medical Devices & Instruments industry, the median ROIC % is 1.25 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Otofarma SpA's current ROIC % is 13.38%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Otofarma SpA stock overvalued right now?
Otofarma SpA (MIL:OTO) has a current ROIC % of 13.38%. The current ROIC % is 13.38% and 970.4% above the Medical Devices & Instruments industry median of 1.25. Otofarma SpA's overall GF Score™ is 16/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROIC % calculated?
ROIC % is calculated from a company's financial statements. For Otofarma SpA (MIL:OTO), the current ROIC % is 13.38% as of Dec. 2024. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Otofarma SpA is engaged in the construction and production of hearing aids, is constantly growing in the audiological field to provide adequate responses to every type of hearing aid need to its customers who require the possible personalized application of custom-made hearing aids. It provides otoacoustic medical devices and TELEMEDICINE services exclusively in affiliated pharmacies, possessing a portfolio of Instrumental IT patents.
16GF Score
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