ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Tokyu Fudosan Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was 1.43%.
As of today (2024-12-14), Tokyu Fudosan Holdings's WACC % is 1.94%. Tokyu Fudosan Holdings's ROIC % is 2.55% (calculated using TTM income statement data).
Tokyu Fudosan Holdings 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.
* 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 Tokyu Fudosan Holdings's ROIC %
For the Real Estate - Diversified subindustry, Tokyu Fudosan Holdings'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.
Tokyu Fudosan Holdings's ROIC % Distribution in the Real Estate Industry
For the Real Estate industry and Real Estate sector, Tokyu Fudosan Holdings's ROIC % distribution charts can be found below:
* The bar in red indicates where Tokyu Fudosan Holdings's ROIC % falls into.
Tokyu Fudosan Holdings ROIC % Calculation
Tokyu Fudosan Holdings's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Mar. 2024 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, Tokyu Fudosan Holdings's WACC % is 1.94%. Tokyu Fudosan Holdings's ROIC % is 2.55% (calculated using TTM income statement data).
Tokyu Fudosan Holdings 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.
Tokyu Fudosan Holdings 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.
Tokyu Fudosan Holdings ROIC % Related Terms
Thank you for viewing the detailed overview of Tokyu Fudosan Holdings's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Tokyu Fudosan Holdings Corp engages in the management and administration of a host of businesses. The business that compose Tokyu Fudosan Holdings operate in the following business segments: urban development, residential, wellness, innovation, property management, real estate agency, and tokyu hands. Altogether, the group develops, leases, and operates office buildings, commercial facilities, rental residences, and other properties. Tokyu's host of businesses also engage in management and operation of resort facilities, sports clubs, and senior housing. Businesses like the innovation segment serve as a complement and include overseas operations, custom homes, renovation, and landscaping.
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