ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Teva Pharmaceutical Industries's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was 12.66%.
As of today (2024-12-15), Teva Pharmaceutical Industries's WACC % is 7.95%. Teva Pharmaceutical Industries's ROIC % is 22.62% (calculated using TTM income statement data).
Teva Pharmaceutical Industries 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.
Teva Pharmaceutical Industries 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 Teva Pharmaceutical Industries's ROIC %
For the Drug Manufacturers - Specialty & Generic subindustry, Teva Pharmaceutical Industries'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.
Teva Pharmaceutical Industries's ROIC % Distribution in the Drug Manufacturers Industry
For the Drug Manufacturers industry and Healthcare sector, Teva Pharmaceutical Industries's ROIC % distribution charts can be found below:
* The bar in red indicates where Teva Pharmaceutical Industries's ROIC % falls into.
Teva Pharmaceutical Industries ROIC % Calculation
Teva Pharmaceutical Industries'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 (Sep. 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.
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, Teva Pharmaceutical Industries's WACC % is 7.95%. Teva Pharmaceutical Industries's ROIC % is 22.62% (calculated using TTM income statement data).
Teva Pharmaceutical Industries 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.
Teva Pharmaceutical Industries 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.
Teva Pharmaceutical Industries ROIC % Related Terms
Thank you for viewing the detailed overview of Teva Pharmaceutical Industries's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Teva Pharmaceutical Industries Business Description
Teva Pharmaceutical Industries, based in Israel, is the leading generic drug manufacturer in the world. Teva derives half of its sales from North America and makes up a high-single-digit percentage of the total number of generic prescriptions in the US. It also has a significant presence in Europe, Japan, Russia, and Israel. Besides generics, Teva has a portfolio of innovative medicines and biosimilars in three main therapeutic areas: central nervous system with Copaxone, Ajovy, and Austedo; respiratory with Qvar and ProAir; and oncology with Truxima, Herzuma, and Bendeka/Treanda. Teva also sells active pharmaceutical ingredients, offers contract manufacturing services, and owns Anda, a US-based generic and specialty drug distributor.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
TEVVF.PFD has been successfully added to your 