Eddy Smart Home Solutions (TSXV:EDY) ROIC % : -32.84% (As of Jun. 2024)

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What is Eddy Smart Home Solutions 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 %. Eddy Smart Home Solutions's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2024 was -32.84%.

As of today (2024-09-26), Eddy Smart Home Solutions's WACC % is 13.16%. Eddy Smart Home Solutions's ROIC % is -28.05% (calculated using TTM income statement data). Eddy Smart Home Solutions earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Eddy Smart Home Solutions ROIC % Historical Data

The historical data trend for Eddy Smart Home Solutions'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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Eddy Smart Home Solutions ROIC % Chart

Eddy Smart Home Solutions Annual Data

Trend

Dec20

Dec21

Dec22

Dec23

ROIC %

-102.91

-55.20

Eddy Smart Home Solutions Quarterly Data
	Mar21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24	Jun24
ROIC %	Get a 7-Day Free Trial								-56.33	-45.90	-23.33	-7.67	-32.84

Competitive Comparison of Eddy Smart Home Solutions's ROIC %

For the Scientific & Technical Instruments subindustry, Eddy Smart Home Solutions'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.

Eddy Smart Home Solutions's ROIC % Distribution in the Hardware Industry

For the Hardware industry and Technology sector, Eddy Smart Home Solutions's ROIC % distribution charts can be found below:

* The bar in red indicates where Eddy Smart Home Solutions's ROIC % falls into.

Eddy Smart Home Solutions ROIC % Calculation

Eddy Smart Home Solutions's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROIC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	-6.434 * ( 1 - 0% )	/	( (10.111	+	13.199)	/ 2 )
=	-6.434	/	11.655
=	-55.20 %

where

	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	))
=	15.611	-	5.059	-	( 0.45	-	max(0, 8.456	-	8.897	+	0.45	))
=	10.111

	Invested Capital		(A: Dec. 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	))
=	11.336	-	4.779	-	( 1.142	-	max(0, 13.364	-	6.722	+	1.142	))
=	13.199

Eddy Smart Home Solutions's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2024 is calculated as:

	ROIC % (Q: Jun. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2024 )	+	Invested Capital (Q: Jun. 2024 ))	/ count )
=	-4.412 * ( 1 - 0% )	/	( (13.604	+	13.265)	/ 2 )
=	-4.412	/	13.4345
=	-32.84 %

where

	Invested Capital		(Q: Mar. 2024 )
=	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	))
=	11.23	-	4.048	-	( 0.305	-	max(0, 12.8	-	6.378	+	0.305	))
=	13.604

	Invested Capital		(Q: Jun. 2024 )
=	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	))
=	17.925	-	4.085	-	( 6.92	-	max(0, 12.13	-	12.705	+	6.92	))
=	13.265

Note: The Operating Income data used here is four times the quarterly (Jun. 2024) data.

Eddy Smart Home Solutions (TSXV:EDY) 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, Eddy Smart Home Solutions's WACC % is 13.16%. Eddy Smart Home Solutions's ROIC % is -28.05% (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.

Eddy Smart Home Solutions ROIC % Related Terms

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Eddy Smart Home Solutions Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Hardware » Eddy Smart Home Solutions Ltd (TSXV:EDY) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

5255 Yonge Street, Suite 900, Toronto, ON, CAN, M2N 6P4

Website

https://www.eddysolutions.com

Eddy Smart Home Solutions Ltd is a provider and developer of residential and commercial smart water metering products and monitoring services. It helps property owners to protect, control, and conserve water usage by combining water-sensing devices with behavioral learning software. The Company operates in three operating segments, which are multi-family residences (MFR), single family residences (SFR) and customer & industrial (C&I). The company's revenue is generated from customers in Canada and the USA.

Executives

Mark Silver	10% Security Holder, Director
Boris Baril	Senior Officer
Cory Silver	Senior Officer

Eddy Smart Home Solutions Headlines

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