ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Thermal Energy International's annualized return on invested capital (ROIC %) for the quarter that ended in Aug. 2024 was 25.77%.
As of today (2024-12-12), Thermal Energy International's WACC % is 3.63%. Thermal Energy International's ROIC % is 17.90% (calculated using TTM income statement data).
Thermal Energy International 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.
Thermal Energy International 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 Thermal Energy International's ROIC %
For the Pollution & Treatment Controls subindustry, Thermal Energy International'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.
Thermal Energy International's ROIC % Distribution in the Industrial Products Industry
For the Industrial Products industry and Industrials sector, Thermal Energy International's ROIC % distribution charts can be found below:
* The bar in red indicates where Thermal Energy International's ROIC % falls into.
Thermal Energy International ROIC % Calculation
Thermal Energy International's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in May. 2024 is calculated as:
Note:
The Operating Income data used here is four times the quarterly (Aug. 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.
Thermal Energy International (OTCPK:TMGEF) 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, Thermal Energy International's WACC % is 3.63%. Thermal Energy International's ROIC % is 17.90% (calculated using TTM income statement data).
Thermal Energy International 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.
Thermal Energy International 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.
Thermal Energy International ROIC % Related Terms
Thank you for viewing the detailed overview of Thermal Energy International's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Thermal Energy International Inc is a supplier of proprietary, energy efficiency and emissions reduction solutions to the industrial and institutional sectors. It markets, sells, engineers, fabricates, constructs, installs and supports technology lines - heat recovery solutions and condensate return system solutions. The product portfolio consists of GEM steam traps, FLU-ACE - direct contact condensing heat recovery, and Dry Rex - low-temperature biomass drying systems. The operating segment includes geographical areas that reflect the core business which has units located in Ottawa, Canada and Bristol, UK. The firm derives revenue from Canada, the UK, Germany, France, Poland, India, etc and the rest of the world. Substantial sales revenue comes from the USA.
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