Scientific and Medical Equipment House Co (SAU:4014) ROIC % : 6.29% (As of Sep. 2024)

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What is Scientific and Medical Equipment House Co 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 %. Scientific and Medical Equipment House Co's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was 6.29%.

As of today (2025-04-09), Scientific and Medical Equipment House Co's WACC % is 9.57%. Scientific and Medical Equipment House Co's ROIC % is 3.28% (calculated using TTM income statement data). Scientific and Medical Equipment House Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Scientific and Medical Equipment House Co ROIC % Historical Data

The historical data trend for Scientific and Medical Equipment House Co'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.

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Scientific and Medical Equipment House Co ROIC % Chart

Scientific and Medical Equipment House Co Annual Data

Trend

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

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10.87

2.50

3.73

Scientific and Medical Equipment House Co Quarterly Data
	Dec17	Dec18	Dec19	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24	Sep24
ROIC %	Get a 7-Day Free Trial														9.72	-0.61	4.57	4.32	6.29

Competitive Comparison of Scientific and Medical Equipment House Co's ROIC %

For the Medical Instruments & Supplies subindustry, Scientific and Medical Equipment House 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.

Scientific and Medical Equipment House Co's ROIC % Distribution in the Medical Devices & Instruments Industry

For the Medical Devices & Instruments industry and Healthcare sector, Scientific and Medical Equipment House Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Scientific and Medical Equipment House Co's ROIC % falls into.

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Scientific and Medical Equipment House Co ROIC % Calculation

Scientific and Medical Equipment House Co'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 )
=	47.375 * ( 1 - 28.61% )	/	( (793.57	+	1021.467)	/ 2 )
=	33.8210125	/	907.5185
=	3.73 %

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	))
=	931.033	-	82.905	-	( 54.558	-	max(0, 378.513	-	834.466	+	54.558	))
=	793.57

	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	))
=	1104.043	-	65.628	-	( 16.948	-	max(0, 509.353	-	1002.139	+	16.948	))
=	1021.467

Scientific and Medical Equipment House Co'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 )
=	69.26 * ( 1 - 20.01% )	/	( (937.801	+	824.44)	/ 2 )
=	55.401074	/	881.1205
=	6.29 %

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	))
=	1033.661	-	66.456	-	( 29.404	-	max(0, 421.826	-	942.939	+	29.404	))
=	937.801

	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	))
=	997.867	-	76.61	-	( 96.817	-	max(0, 372.957	-	912.452	+	96.817	))
=	824.44

Note: The Operating Income data used here is four times the quarterly (Sep. 2024) data.

Scientific and Medical Equipment House Co (SAU:4014) 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, Scientific and Medical Equipment House Co's WACC % is 9.57%. Scientific and Medical Equipment House Co's ROIC % is 3.28% (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.

Scientific and Medical Equipment House Co ROIC % Related Terms

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Scientific and Medical Equipment House Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Healthcare » Medical Devices & Instruments » Scientific and Medical Equipment House Co (SAU:4014) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

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Address

King Fahad service Road, P.O. Box 1584, Al-Mutammarat District, Riyadh, SAU, 12711

Website

https://www.smeh.com.sa

Scientific and Medical Equipment House Co is engaged in general contracting of buildings, roads, and bridges, maintaining, cleaning, managing, and operating medical centers, maintenance of scientific and medical equipment, wholesale and retail trade in medical, laboratorial, and scientific equipment and its accessories, import and export services, and catering services among others. The company's reportable segments are; Operation and maintenance, Medical equipment sales and post-sale maintenance services revenue, Construction segment, Meat and food segment, and Medicine and medical supplies. A majority of its revenue is generated from the Operation and maintenance segment which deals with the supply of medical and non-medical staff and medical equipment maintenance services.

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