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TJX (TJX) ROIC % : 20.43% (As of Apr. 2024)


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What is TJX 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 %. TJX's annualized return on invested capital (ROIC %) for the quarter that ended in Apr. 2024 was 20.43%.

As of today (2024-07-24), TJX's WACC % is 8.16%. TJX's ROIC % is 23.76% (calculated using TTM income statement data). TJX 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.


TJX ROIC % Historical Data

The historical data trend for TJX'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.

TJX ROIC % Chart

TJX Annual Data
Trend Jan15 Jan16 Jan17 Jan18 Jan19 Jan20 Jan21 Jan22 Jan23 Jan24
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 25.54 3.11 18.33 18.57 20.79

TJX Quarterly Data
Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23 Jul23 Oct23 Jan24 Apr24
ROIC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 17.94 21.12 25.48 27.43 20.43

Competitive Comparison of TJX's ROIC %

For the Apparel Retail subindustry, TJX'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.


TJX's ROIC % Distribution in the Retail - Cyclical Industry

For the Retail - Cyclical industry and Consumer Cyclical sector, TJX's ROIC % distribution charts can be found below:

* The bar in red indicates where TJX's ROIC % falls into.



TJX ROIC % Calculation

TJX's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jan. 2024 is calculated as:

ROIC % (A: Jan. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Jan. 2023 ) + Invested Capital (A: Jan. 2024 ))/ count )
=5797 * ( 1 - 25.02% )/( (20321 + 21501)/ 2 )
=4346.5906/20911
=20.79 %

where

TJX's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Apr. 2024 is calculated as:

ROIC % (Q: Apr. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jan. 2024 ) + Invested Capital (Q: Apr. 2024 ))/ count )
=5360 * ( 1 - 23.02% )/( (21501 + 18885)/ 2 )
=4126.128/20193
=20.43 %

where

Note: The Operating Income data used here is four times the quarterly (Apr. 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.


TJX  (NYSE:TJX) 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, TJX's WACC % is 8.16%. TJX's ROIC % is 23.76% (calculated using TTM income statement data). TJX 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. TJX 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.


TJX ROIC % Related Terms

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TJX (TJX) Business Description

Address
770 Cochituate Road, Framingham, MA, USA, 01701
TJX Companies is the leading off-price retailer of apparel, accessories, and home merchandise in the United States. The firm leverages its more than 21,000 global vendor relationships to procure and sell brand-name merchandise at prices 20%-60% cheaper than conventional retail channels. TJX opportunistically purchases excess inventory that stems from manufacturing overruns and retail closeout sales. The off-price retailer disperses its vast and disparate merchandise across its 4,900 global stores, creating a treasure-hunt shopping experience for consumers. Over three quarters of TJX's sales are derived from the United States, primarily via the T.J. Maxx, Marshalls, and HomeGoods banners. About 10% of sales are from Canada and 12% from Europe and Australia.
Executives
Ernie Herrman officer: SEVP, President, Marmaxx 770 COCHITUATE ROAD, FRAMINGHAM MA 01701
Wagner Charles F Jr director C/O MILLIPORE CORP, BILLERICA MA 01820
Carol Meyrowitz officer: President -- Marmaxx Group TJX COMPANIES INC, 770 COCHITUATE RD, FRAMINGHAM MA 01701
Kenneth Canestrari officer: SEVP - Group President THE TJX COMPANIES, INC., 770 COCHITUATE ROAD, FRAMINGHAM MA 01701
Scott Goldenberg officer: EVP, CFO THE TJX COMPANIES, INC., 770 COCHITUATE ROAD, FRAMINGHAM MA 01701
John Klinger officer: EVP, CFO C/O THE TJX COMPANIES, INC., 770 COCHITUATE ROAD, FRAMINGHAM MA 01701
Louise Greenlees officer: SEVP - Group President C/O THE TJX COMPANIES, INC., 770 COCHITUATE ROAD, FRAMINGHAM MA 01701
Amy B Lane director 1626 EAST JEFFERSON ST, ROCKVILLE MD 20852
Richard Sherr officer: SEVP, Group President THE TJX COMPANIES, INC., 770 COCHITUATE ROAD, FRAMINGHAM MA 01701
C Kim Goodwin director C/O AKAMAI TECHNOLOGIES, INC., 8 CAMBRIDGE CENTER, CAMBRIDGE MA 02142
Zein Abdalla director 700 ANDERSON HILL ROAD, LEGAL DEPARTMENT, 1/2, PURCHASE NY 10577
Michael F Hines director
Rosemary T Berkery director MERRILL LYNCH CORPORATE SECRETARY, 222 BROADWAY, 17TH FLOOR, NEW YORK NY 10038
David T Ching director C/O SAFEWAY INC, 5918 STONERIDGE MALL ROAD, PLEASANTON CA 94588
Douglas W. Mizzi officer: SEVP - Group President THE TJX COMPANIES, INC., 770 COCHITUATE ROAD, FRAMINGHAM MA 01701