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NTAP (NetApp) ROIC % : 13.29% (As of Oct. 2024)


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What is NetApp 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 %. NetApp's annualized return on invested capital (ROIC %) for the quarter that ended in Oct. 2024 was 13.29%.

As of today (2024-12-12), NetApp's WACC % is 11.63%. NetApp's ROIC % is 13.16% (calculated using TTM income statement data). NetApp 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.


NetApp ROIC % Historical Data

The historical data trend for NetApp'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.

NetApp ROIC % Chart

NetApp Annual Data
Trend Apr15 Apr16 Apr17 Apr18 Apr19 Apr20 Apr21 Apr22 Apr23 Apr24
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 12.49 11.04 14.90 17.71 11.79

NetApp Quarterly Data
Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23 Jul23 Oct23 Jan24 Apr24 Jul24 Oct24
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 11.25 14.89 13.23 11.28 13.29

Competitive Comparison of NetApp's ROIC %

For the Computer Hardware subindustry, NetApp'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.


NetApp's ROIC % Distribution in the Hardware Industry

For the Hardware industry and Technology sector, NetApp's ROIC % distribution charts can be found below:

* The bar in red indicates where NetApp's ROIC % falls into.



NetApp ROIC % Calculation

NetApp's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Apr. 2024 is calculated as:

ROIC % (A: Apr. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Apr. 2023 ) + Invested Capital (A: Apr. 2024 ))/ count )
=1268 * ( 1 - 21.93% )/( (8213 + 8579)/ 2 )
=989.9276/8396
=11.79 %

where

NetApp's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Oct. 2024 is calculated as:

ROIC % (Q: Oct. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jul. 2024 ) + Invested Capital (Q: Oct. 2024 ))/ count )
=1432 * ( 1 - 16.94% )/( (9065 + 8828)/ 2 )
=1189.4192/8946.5
=13.29 %

where

Note: The Operating Income data used here is four times the quarterly (Oct. 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.


NetApp  (NAS:NTAP) 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, NetApp's WACC % is 11.63%. NetApp's ROIC % is 13.16% (calculated using TTM income statement data). NetApp 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. NetApp 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.


NetApp ROIC % Related Terms

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NetApp Business Description

Address
3060 Olsen Drive, San Jose, CA, USA, 95128
NetApp Inc is a provider of enterprise data management and storage solutions. The company's segments include Hybrid Cloud and Public Cloud. It generates maximum revenue from the Hybrid Cloud segment. The Hybrid Cloud segment offers a portfolio of storage management and infrastructure solutions that help customers recast their traditional data centers with the power of cloud. This portfolio is designed to operate with public clouds to unlock the potential of hybrid, multi-cloud operations. Hybrid Cloud is composed of software, hardware, and related support, as well as professional and other services.
Executives
Thomas Michael Nevens director C/O BORLAND SOFTWARE CORPORATION, 20450 STEVENS CREEK BLVD, SUITE 800, CUPERTINO CA 95014
George Kurian director, officer: Chief Executive Officer C/O NETAPP, 495 E. JAVA DRIVE, SUNNYVALE CA 94089
Elizabeth M O'callahan officer: EVP, GC and Secretary NETAPP, INC, 3060 OLSEN DRIVE, SAN JOSE CA 95128
Cesar Cernuda officer: President 1395 CROSSMAN AVENUE, SUNNYVALE CA 94089
Michael J Berry officer: EVP Finance & Operations, CFO C/O INFORMATICA CORPORATION, 2100 SEAPORT BOULEVARD, REDWOOD CITY CA 94063
George T Shaheen director
Gerald Held director
Robert Parks officer: Chief Accounting Officer C/O SYNEOS HEALTH, INC., 1030 SYNC STREET, MORRISVILLE NC 27560
Carrie Palin director 1801 CALIFORNIA STREET, SUITE 500, DENVER CO 80202
Deepak Ahuja director C/O TESLA MOTORS, INC., 3500 DEER CREEK ROAD, PALO ALTO CA 94304
Kathryn Hill director 7 WORLD TRADE CENTER, 250 GREENWICH STREET, NEW YORK NY 10007
Scott F. Schenkel director C/O EBAY INC., 2025 HAMILTON AVE., SAN JOSE CA 95125
Deborah Kerr director 901 MARQUETTE AVENUE, SUITE 3200, MINNEAPOLIS MN 55402
Harvinder S Bhela officer: EVP, Chief Product Officer NETAPP, INC, 3060 OLSEN DRIVE, SAN JOSE CA 95128
Matthew K Fawcett officer: Senior VP, General Counsel 495 EAST JAVA DRIVE, SUNNYVALE CA 94089