ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Forge Auto International's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was 14.11%.
As of today (2025-04-01), Forge Auto International's WACC % is 10.60%. Forge Auto International's ROIC % is 14.11% (calculated using TTM income statement data).
Forge Auto International 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.
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Forge Auto International ROIC % Chart
Forge Auto International Annual Data
Trend
Mar22
Mar23
Mar24
ROIC %
14.38
13.74
14.11
Forge Auto International Semi-Annual Data
Mar22
Mar23
Mar24
ROIC %
14.38
13.74
14.11
Competitive Comparison of Forge Auto International's ROIC %
For the Auto Parts subindustry, Forge Auto International'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.
Forge Auto International's ROIC % Distribution in the Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, Forge Auto International's ROIC % distribution charts can be found below:
* The bar in red indicates where Forge Auto International's ROIC % falls into.
Note:
The Operating Income data used here is one times the annual (Mar. 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.
Forge Auto International (NSE:FORGEAUTO) 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, Forge Auto International's WACC % is 10.60%. Forge Auto International's ROIC % is 14.11% (calculated using TTM income statement data).
Forge Auto International 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.
Forge Auto International 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.
Forge Auto International ROIC % Related Terms
Thank you for viewing the detailed overview of Forge Auto International's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Forge Auto International Ltd is an engineering company engaged in forging and manufacturing of complex and safety-critical, forged and precision machined components such as big rings, small rings, big ball studs, gear blank with a broach, stub axle assembly, flange yoke 325 HS, catering to different industry sectors like auto industry including automobiles, tractors, railways etc. and non-auto sectors like agriculture parts, hydraulic parts, striking tools etc. It serves its customers comprising of domestic and global original equipment manufacturers (OEMs) engaged in manufacturing for both the automotive sector and other nonautomotive sector, used across industries by a diversified base of customers.
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