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ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Marketwise's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was 22.00%.
As of today (2024-12-11), Marketwise's WACC % is 6.01%. Marketwise's ROIC % is 15.68% (calculated using TTM income statement data). Marketwise 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.
The historical data trend for Marketwise'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.
Marketwise Annual Data | |||||||||||||||
Trend | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||
ROIC % | Get a 7-Day Free Trial | 9.15 | -157.88 | -210.51 | 16.87 | 11.12 |
Marketwise Quarterly Data | ||||||||||||||||||||
Dec18 | Dec19 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | Jun24 | Sep24 | |
ROIC % | Get a 7-Day Free Trial | 9.67 | 3.29 | 18.96 | 19.71 | 22.00 |
For the Financial Data & Stock Exchanges subindustry, Marketwise'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.
For the Capital Markets industry and Financial Services sector, Marketwise's ROIC % distribution charts can be found below:
* The bar in red indicates where Marketwise's ROIC % falls into.
Marketwise'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 ) |
= | 54.388 * ( 1 - 3.21% ) | / | ( (501.173 | + | 445.87) | / 2 ) |
= | 52.6421452 | / | 473.5215 | |||
= | 11.12 % |
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 | )) |
= | 442.508 | - | 47.666 | - | ( 158.575 | - | max(0, 385.506 | - | 279.175 | + | 158.575 | )) |
= | 501.173 |
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 | )) |
= | 396.555 | - | 56.737 | - | ( 155.174 | - | max(0, 373.893 | - | 267.841 | + | 155.174 | )) |
= | 445.87 |
Marketwise's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2024 is calculated as:
ROIC % (Q: Sep. 2024 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Jun. 2024 ) | + | Invested Capital (Q: Sep. 2024 )) | / count ) |
= | 87.608 * ( 1 - 4.1% ) | / | ( (399.937 | + | 363.999) | / 2 ) |
= | 84.016072 | / | 381.968 | |||
= | 22.00 % |
where
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 | )) |
= | 315.305 | - | 29.734 | - | ( 109.342 | - | max(0, 312.828 | - | 198.462 | + | 109.342 | )) |
= | 399.937 |
Invested Capital | (Q: Sep. 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 | )) |
= | 278.351 | - | 25.829 | - | ( 94.111 | - | max(0, 283.972 | - | 172.495 | + | 94.111 | )) |
= | 363.999 |
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.
Marketwise (NAS:MKTW) 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, Marketwise's WACC % is 6.01%. Marketwise's ROIC % is 15.68% (calculated using TTM income statement data). Marketwise 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. Marketwise 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.
Thank you for viewing the detailed overview of Marketwise's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Glenn H Tongue | director | 600 MONTGOMERY STREET, SUITE 1100, SAN FRANCISCO CA 94111 |
Greenhaven Road Capital Fund 2, L.p. | 10 percent owner | 8 SOUND SHORE DRIVE, C/O ROYCE & ASSOCIATES, SUITE 190, GREENWICH CT 06830 |
Erik Mickels | officer: Chief Financial Officer | 155 108TH AVENUE NE, SUITE 400, BELLEVUE WA 98004 |
Greenhaven Road Investment Management, L.p. | 10 percent owner | 8 SOUND SHORE DRIVE, C/O ROYCE & ASSOCIATES, SUITE 190, GREENWICH CT 06830 |
Frank Porter Stansberry | 10 percent owner | 1217 ST. PAUL STREET, BALTIMORE MD 21202 |
Amber Lee Mason | officer: Chief Operating Officer | C/O MARKETWISE, 1125 N. CHARLES STREET, BALTIMORE MD 21201 |
Matthew Tate Smith | director | C/O MARKETWISE, 1125 N. CHARLES STREET, BALTIMORE MD 21201 |
Matthew Joseph Turner | director | C/O MARKETWISE, 1125 N. CHARLES STREET, BALTIMORE MD 21201 |
David Eifrig | director | C/O MARKETWISE, 1125 N. CHARLES STREET, BALTIMORE MD 21201 |
Stephen M Park | officer: Chief Financial Officer | C/O MARKETWISE, 1125 N. CHARLES STREET, BALTIMORE MD 21201 |
Riaan Hodgson | director, officer: Chief Operating Officer | C/O ASCENDANT DIGITAL ACQUISITION CORP., 667 MADISON AVENUE, 5TH FLOOR, NEW YORK NY 10065 |
Greenhaven Road Special Opportunities Fund Lp | 10 percent owner | 8 SOUND SHORE DRIVE, SUITE 190, GREENWICH CT 06830 |
Gary Daniel Anderson | officer: GENERAL COUNSEL | C/O MARKETWISE, 1125 N. CHARLES STREET, BALTIMORE MD 21201 |
Mcginness James Andrew Iii | officer: Corporate Controller | C/O MARKETWISE, 1125 N. CHARLES STREET, BALTIMORE MD 21201 |
Marco Galsim | officer: Chief Information Officer | C/O MARKETWISE, 1125 N. CHARLES STREET, BALTIMORE MD 21201 |
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