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WM (Waste Management) ROIC % : 11.08% (As of Sep. 2024)


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What is Waste Management 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 %. Waste Management's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was 11.08%.

As of today (2024-12-13), Waste Management's WACC % is 6.77%. Waste Management's ROIC % is 10.77% (calculated using TTM income statement data). Waste Management 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.


Waste Management ROIC % Historical Data

The historical data trend for Waste Management'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.

Waste Management ROIC % Chart

Waste Management Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 10.11 7.96 8.44 9.38 9.81

Waste Management Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
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 10.61 10.16 11.00 10.74 11.08

Competitive Comparison of Waste Management's ROIC %

For the Waste Management subindustry, Waste Management'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.


Waste Management's ROIC % Distribution in the Waste Management Industry

For the Waste Management industry and Industrials sector, Waste Management's ROIC % distribution charts can be found below:

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



Waste Management ROIC % Calculation

Waste Management'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 )
=3823 * ( 1 - 24.66% )/( (28819 + 29931)/ 2 )
=2880.2482/29375
=9.81 %

where

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

ROIC % (Q: Sep. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jun. 2024 ) + Invested Capital (Q: Sep. 2024 ))/ count )
=4508 * ( 1 - 23.62% )/( (30386 + 31746)/ 2 )
=3443.2104/31066
=11.08 %

where

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.


Waste Management  (NYSE:WM) 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, Waste Management's WACC % is 6.77%. Waste Management's ROIC % is 10.77% (calculated using TTM income statement data). Waste Management 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. Waste Management 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.


Waste Management ROIC % Related Terms

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Waste Management Business Description

Address
800 Capitol Street, Suite 3000, Houston, TX, USA, 77002
WM ranks as the largest integrated provider of traditional solid waste services in the United States, operating 263 active landfills and about 332 transfer stations. The company serves residential, commercial, industrial, and medical end markets and is also a leading recycler in North America.
Executives
Maryrose Sylvester director C/O 3700 WEST JUNEAU AVENUE, MILWAUKEE WI 53208
Michael J. Watson officer: Sr. VP-Chief Customer Officer 800 CAPITOL STREET 3000, HOUSTON TX 77002
Rafael Carrasco officer: SVP Operations 800 CAPITOL STREET 3000, HOUSTON TX 77002
Fish James C Jr officer: SVP, Eastern Group 800 CAPITOL STREET 3000, HOUSTON TX 77002
Charles C Boettcher officer: Sr VP Chief Legal Officer 800 CAPITOL STREET 3000, HOUSTON TX 77002
Christopher P. Desantis officer: SVP Operations - East 800 CAPITOL STREET 3000, HOUSTON TX 77002
Kelly C. Rooney officer: SVP Chief People Officer 800 CAPITOL STREET #3000, HOUSTON TX 77002
John A. Carroll officer: VP & Chief Accounting Officer 800 CAPITOL STREET 3000, HOUSTON TX 77002
Donald J Smith officer: Sr. VP - Operations 800 CAPITOL STREET 3000, HOUSTON TX 77002
John J Morris officer: Chief Strategy Officer 800 CAPITOL STREET 3000, HOUSTON TX 77002
Tara J. Hmmer officer: SVP Operat Safety Envir Compl 800 CAPITOL STREET 3000, HOUSTON X1 77002
Devina A Rankin officer: VP & Treasurer 800 CAPITOL STREET 3000, HOUSTON TX 77002
John C Pope director 810 S. RIDGE RD, LAKE FOREST IL 60045
Bruce E. Chinn director 800 CAPITOL STREET 3000, HOUSTON TX 77002
Leslie K Nagy officer: VP & Chief Accounting Officer 5 GREENWAY PLAZA, SUITE 100, HOUSTON TX 77046