Darco Water Technologies (SGX:BLR) ROIC % : 2.34% (As of Jun. 2023)

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What is Darco Water Technologies 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 %. Darco Water Technologies's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2023 was 2.34%.

As of today (2024-05-28), Darco Water Technologies's WACC % is 7.87%. Darco Water Technologies's ROIC % is 3.57% (calculated using TTM income statement data). Darco Water Technologies earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Darco Water Technologies ROIC % Historical Data

The historical data trend for Darco Water Technologies'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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Darco Water Technologies ROIC % Chart

Darco Water Technologies Annual Data

Trend

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

ROIC %

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-1.95

-18.50

3.25

-10.43

1.54

Darco Water Technologies Semi-Annual Data
	Dec13	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23
ROIC %	Get a 7-Day Free Trial															-15.31	-8.10	-2.39	5.08	2.34

Competitive Comparison of Darco Water Technologies's ROIC %

For the Pollution & Treatment Controls subindustry, Darco Water Technologies'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.

Darco Water Technologies's ROIC % Distribution in the Industrial Products Industry

For the Industrial Products industry and Industrials sector, Darco Water Technologies's ROIC % distribution charts can be found below:

* The bar in red indicates where Darco Water Technologies's ROIC % falls into.

Darco Water Technologies ROIC % Calculation

Darco Water Technologies's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2022 is calculated as:

	ROIC % (A: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2021 )	+	Invested Capital (A: Dec. 2022 ))	/ count )
=	0.818 * ( 1 - 21.6% )	/	( (38.247	+	44.875)	/ 2 )
=	0.641312	/	41.561
=	1.54 %

where

	Invested Capital		(A: Dec. 2021 )
=	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	))
=	83.651	-	21.971	-	( 23.433	-	max(0, 45.432	-	72.946	+	23.433	))
=	38.247

	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	))
=	86.97	-	22.267	-	( 19.828	-	max(0, 45.66	-	68.237	+	19.828	))
=	44.875

Darco Water Technologies's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2023 is calculated as:

	ROIC % (Q: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2022 )	+	Invested Capital (Q: Jun. 2023 ))	/ count )
=	1.154 * ( 1 - 1.94% )	/	( (44.875	+	51.987)	/ 2 )
=	1.1316124	/	48.431
=	2.34 %

where

	Invested Capital		(Q: 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	))
=	86.97	-	22.267	-	( 19.828	-	max(0, 45.66	-	68.237	+	19.828	))
=	44.875

	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	))
=	84.333	-	19.167	-	( 13.179	-	max(0, 40.435	-	62.033	+	13.179	))
=	51.987

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

Darco Water Technologies (SGX:BLR) 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, Darco Water Technologies's WACC % is 7.87%. Darco Water Technologies's ROIC % is 3.57% (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.

Darco Water Technologies ROIC % Related Terms

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Darco Water Technologies (SGX:BLR) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » Darco Water Technologies Ltd (SGX:BLR) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

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Address

120 Lower Delta Road, No. 04-03 Cendex Centre, Singapore, SGP, 169208

Website

https://www.darcowater.com

Darco Water Technologies Ltd is a provider of integrated engineering and knowledge-based water and waste water treatment solutions, and vacuum systems with a global presence in China, Malaysia and Singapore. It is also an Engineering, Procurement, and Construction player specializing in industrial water treatment. The company's segments include EE Systems that designs, fabricates, assembles, installs and commissions engineered water systems for industrial application; WM Services which services and maintains water and wastewater treatment plants; and Trading is engaged in the trade and supplies of goods comprising chemicals, electrical controls and related instruments used in water treatment systems.

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