ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. ISEC Healthcare's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was 15.94%.
As of today (2024-05-27), ISEC Healthcare's WACC % is 6.09%. ISEC Healthcare's ROIC % is 16.17% (calculated using TTM income statement data).
ISEC Healthcare 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.
ISEC Healthcare ROIC % Historical Data
The historical data trend for ISEC Healthcare'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.
Competitive Comparison of ISEC Healthcare's ROIC %
For the Medical Care Facilities subindustry, ISEC Healthcare'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.
ISEC Healthcare's ROIC % Distribution in the Healthcare Providers & Services Industry
For the Healthcare Providers & Services industry and Healthcare sector, ISEC Healthcare's ROIC % distribution charts can be found below:
* The bar in red indicates where ISEC Healthcare's ROIC % falls into.
ISEC Healthcare ROIC % Calculation
ISEC Healthcare'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 (Mar. 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.
ISEC Healthcare (SGX:40T) 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, ISEC Healthcare's WACC % is 6.09%. ISEC Healthcare's ROIC % is 16.17% (calculated using TTM income statement data).
ISEC Healthcare 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.
ISEC Healthcare 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.
ISEC Healthcare ROIC % Related Terms
Thank you for viewing the detailed overview of ISEC Healthcare's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
ISEC Healthcare Ltd is a Singapore based company engaged in providing medical eye care services through its subsidiaries. It also provides ambulatory surgical centers. In addition, the group is also focused on offering general medical services and aesthetic treatment services. The company has two reportable segments, namely Specialized health services, which include the provision of medical care, consultancy, treatment and surgery in the field of ophthalmology; and General health services which includes the provision of general medical and procedural treatment services It generates maximum revenue from the specialized health services segment. The firm operates in Singapore and Malaysia, of which key revenue is derived from Malaysia.
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