ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Zamil Industrial Investment Co's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2024 was 2.67%.
As of today (2024-09-24), Zamil Industrial Investment Co's WACC % is 8.53%. Zamil Industrial Investment Co's ROIC % is -6.90% (calculated using TTM income statement data).
Zamil Industrial Investment Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Zamil Industrial Investment Co ROIC % Historical 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.
Competitive Comparison of Zamil Industrial Investment Co's ROIC %
For the Building Products & Equipment subindustry, Zamil Industrial Investment Co'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.
Zamil Industrial Investment Co's ROIC % Distribution in the Construction Industry
For the Construction industry and Industrials sector, Zamil Industrial Investment Co's ROIC % distribution charts can be found below:
* The bar in red indicates where Zamil Industrial Investment Co's ROIC % falls into.
Zamil Industrial Investment Co ROIC % Calculation
Zamil Industrial Investment Co's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:
Note:
The Operating Income data used here is four times the quarterly (Jun. 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.
Zamil Industrial Investment Co (SAU:2240) 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, Zamil Industrial Investment Co's WACC % is 8.53%. Zamil Industrial Investment Co's ROIC % is -6.90% (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.
Zamil Industrial Investment Co ROIC % Related Terms
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Zamil Industrial Investment Co Business Description
Zamil Industrial Investment Co is engaged in the development of design and engineering solutions for use in the construction industry. It designs and manufactures pre-engineered steel buildings, steel structures, air conditioning and climate control systems, telecom and transmission towers, process equipment, precast concrete building products, rock wool, fiberglass and engineered plastic foam insulations, and solar power projects. Its operating segments are the Air conditioners industry; the Steel industry; the Insulation industry; and Corporate and others. The key revenue is derived from the Air conditioners industry and the Steel industry. The company has a business presence in Saudi Arabia, Africa, and Other Asian countries, of which key revenue is derived from Saudi Arabia.
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