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Resources Connection (Resources Connection) ROIC % : 2.75% (As of Feb. 2024)


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What is Resources Connection 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 %. Resources Connection's annualized return on invested capital (ROIC %) for the quarter that ended in Feb. 2024 was 2.75%.

As of today (2024-06-12), Resources Connection's WACC % is 6.59%. Resources Connection's ROIC % is 6.28% (calculated using TTM income statement data). Resources Connection earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Resources Connection ROIC % Historical Data

The historical data trend for Resources Connection'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.

Resources Connection ROIC % Chart

Resources Connection Annual Data
Trend May14 May15 May16 May17 May18 May19 May20 May21 May22 May23
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 11.09 8.86 6.90 17.90 15.84

Resources Connection Quarterly Data
May19 Aug19 Nov19 Feb20 May20 Aug20 Nov20 Feb21 May21 Aug21 Nov21 Feb22 May22 Aug22 Nov22 Feb23 May23 Aug23 Nov23 Feb24
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 11.13 13.73 3.45 5.36 2.75

Competitive Comparison of Resources Connection's ROIC %

For the Consulting Services subindustry, Resources Connection'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.


Resources Connection's ROIC % Distribution in the Business Services Industry

For the Business Services industry and Industrials sector, Resources Connection's ROIC % distribution charts can be found below:

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



Resources Connection ROIC % Calculation

Resources Connection's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in May. 2023 is calculated as:

ROIC % (A: May. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: May. 2022 ) + Invested Capital (A: May. 2023 ))/ count )
=75.743 * ( 1 - 25.14% )/( (380.07 + 335.975)/ 2 )
=56.7012098/358.0225
=15.84 %

where

Invested Capital(A: May. 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))
=581.473 - 97.179 - ( 104.224 - max(0, 124.322 - 308.541+104.224))
=380.07

Invested Capital(A: May. 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))
=531.999 - 79.24 - ( 116.784 - max(0, 97.084 - 264.066+116.784))
=335.975

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

ROIC % (Q: Feb. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Nov. 2023 ) + Invested Capital (Q: Feb. 2024 ))/ count )
=17.044 * ( 1 - 43.17% )/( (362.04 + 343.432)/ 2 )
=9.6861052/352.736
=2.75 %

where

Invested Capital(Q: Feb. 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))
=523.164 - 65.896 - ( 113.836 - max(0, 84.147 - 251.341+113.836))
=343.432

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


Resources Connection  (NAS:RGP) 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, Resources Connection's WACC % is 6.59%. Resources Connection's ROIC % is 6.28% (calculated using TTM income statement data).


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.


Resources Connection ROIC % Related Terms

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Resources Connection (Resources Connection) Business Description

Traded in Other Exchanges
Address
17101 Armstrong Avenue, Suite 100, Irvine, CA, USA, 92614
Resources Connection Inc provides consulting and business initiative support services primarily through its operative subsidiary, Resources Global Professionals. It has two segments RGP ( Resources Global Professionals.) and Other segments. The company offers transformation and improvement, financial reporting and analysis, strategy development, and program and project management services and support. Its clients operate in the accounting, finance, corporate governance, risk and compliance management, corporate advisory, strategic communications and restructuring, information management, human capital, supply chain management, and legal and regulatory sectors.
Executives
David P White director 17101 ARMSTRONG AVE., STE 100, IRVINE CA 92614
Neil F Dimick director BUILDING 4, TRIDENT PLACE, MOSQUITO WAY, HATFIELD, HERTFORDSHIRE X0 AL10 9UL
Timothy L Brackney officer: President and COO 17101 ARMSTRONG AVE, STE 100, IRVINE CA 92614
Kate W Duchene director, officer: President & CEO 17101 ARMSTRONG AVE, STE 100, IRVINE CA 92614
Jennifer Y Ryu officer: CFO 17101 ARMSTRONG AVE, STE 100, IRVINE CA 92614
Robert F Kistinger director 17101 ARMSTRONG AVE, STE 100, IRVINE CA 92614
Jolene Sarkis director 17101 ARMSTRONG AVE, STE 100, IRVINE CA 92614
Maltzan Marco Von director 17101 ARMSTRONG AVE, STE 100, IRVINE CA 92614
Susan Collyns director 6053 W CENTURY BLVD STE 1100, C/O CALIFORNIA PIZZA KITCHEN INC, LOS ANGLES CA 90045-6430
Donald B Murray director, officer: Chief Executive Officer 17101 ARMSTRONG AVE, STE 100, IRVINE CA 92614
Anthony Cherbak officer: Executive VP of Operations 17101 ARMSTRONG AVE, STE 100, IRVINE CA 92614
Lisa Pierozzi director 17101 ARMSTRONG AVE, STE 100, IRVINE CA 92614
Susan J Crawford director 17101 ARMSTRONG AVE, IRVINE CA 92614
John D Bower officer: Vice-President of Finance C/O RESOURCES CONNECTION, 695 TOWN CENTER DR, COSTA MESA CA 92626
Michael H Wargotz director AXCESS WORLDWIDE, 515 MADISON AVE., 15TH FLOOR, NEW YORK NY 10022