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Arabian International Healthcare Holding Co (SAU:9530) ROIC % : 9.39% (As of Dec. 2023)


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What is Arabian International Healthcare Holding 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 %. Arabian International Healthcare Holding Co's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 9.39%.

As of today (2024-05-24), Arabian International Healthcare Holding Co's WACC % is 8.63%. Arabian International Healthcare Holding Co's ROIC % is 3.96% (calculated using TTM income statement data). Arabian International Healthcare Holding Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Arabian International Healthcare Holding Co ROIC % Historical Data

The historical data trend for Arabian International Healthcare Holding 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.

* Premium members only.

Arabian International Healthcare Holding Co ROIC % Chart

Arabian International Healthcare Holding Co Annual Data
Trend Dec19 Dec20 Dec21 Dec22 Dec23
ROIC %
5.62 7.92 5.10 3.00 3.99

Arabian International Healthcare Holding Co Semi-Annual Data
Dec19 Dec20 Jun21 Dec21 Jun22 Dec22 Jun23 Dec23
ROIC % Get a 7-Day Free Trial 9.12 -5.27 10.79 -0.49 9.39

Competitive Comparison of Arabian International Healthcare Holding Co's ROIC %

For the Medical Care Facilities subindustry, Arabian International Healthcare Holding 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.


Arabian International Healthcare Holding Co's ROIC % Distribution in the Healthcare Providers & Services Industry

For the Healthcare Providers & Services industry and Healthcare sector, Arabian International Healthcare Holding Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Arabian International Healthcare Holding Co's ROIC % falls into.



Arabian International Healthcare Holding Co ROIC % Calculation

Arabian International Healthcare Holding 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 )
=53.25 * ( 1 - 21.46% )/( (1049.249 + 1049.319)/ 2 )
=41.82255/1049.284
=3.99 %

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))
=1408.802 - 275.968 - ( 83.585 - max(0, 885.356 - 1121.641+83.585))
=1049.249

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))
=1401.427 - 269.725 - ( 82.383 - max(0, 874.234 - 1115.309+82.383))
=1049.319

Arabian International Healthcare Holding Co's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2023 is calculated as:

ROIC % (Q: Dec. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jun. 2023 ) + Invested Capital (Q: Dec. 2023 ))/ count )
=110.382 * ( 1 - 9.78% )/( (1071.978 + 1049.319)/ 2 )
=99.5866404/1060.6485
=9.39 %

where

Invested Capital(Q: Jun. 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))
=1425.563 - 267.791 - ( 85.794 - max(0, 929.449 - 1122.741+85.794))
=1071.978

Invested Capital(Q: 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))
=1401.427 - 269.725 - ( 82.383 - max(0, 874.234 - 1115.309+82.383))
=1049.319

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) 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.


Arabian International Healthcare Holding Co  (SAU:9530) 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, Arabian International Healthcare Holding Co's WACC % is 8.63%. Arabian International Healthcare Holding Co's ROIC % is 3.96% (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.


Arabian International Healthcare Holding Co ROIC % Related Terms

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Arabian International Healthcare Holding Co (SAU:9530) Business Description

Traded in Other Exchanges
N/A
Address
Al Marhoma Street, Business Gate, Qortubah, Riyadh, SAU
Arabian International Healthcare Holding Co provides integrated medical solutions to healthcare providers in the health sector in Saudi Arabia through its subsidiaries. Its projects include Cardiology, Intensive care, Operating rooms, Oncology, Hospital Infrastructure, and Others.

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