Palestine Development & Investment Co (XPAE:PADICO) ROIC % : 1.17% (As of Sep. 2024)

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What is Palestine Development & Investment Co 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 %. Palestine Development & Investment Co's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was 1.17%.

As of today (2024-12-12), Palestine Development & Investment Co's WACC % is 7.77%. Palestine Development & Investment Co's ROIC % is 0.78% (calculated using TTM income statement data). Palestine Development & Investment Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Palestine Development & Investment Co ROIC % Historical Data

The historical data trend for Palestine Development & Investment Co'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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Palestine Development & Investment Co ROIC % Chart

Palestine Development & Investment Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

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-0.41

-0.97

-0.32

1.21

1.17

Palestine Development & Investment Co 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															1.06	-0.84	1.82	0.51	1.17

Competitive Comparison of Palestine Development & Investment Co's ROIC %

For the Asset Management subindustry, Palestine Development & Investment Co'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.

Palestine Development & Investment Co's ROIC % Distribution in the Asset Management Industry

For the Asset Management industry and Financial Services sector, Palestine Development & Investment Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Palestine Development & Investment Co's ROIC % falls into.

Palestine Development & Investment Co ROIC % Calculation

Palestine Development & Investment Co'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 )
=	8.404 * ( 1 - -5.36% )	/	( (783.396	+	731.868)	/ 2 )
=	8.8544544	/	757.632
=	1.17 %

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	))
=	797.255	-	28.571	-	( 18.9	-	max(0, 95.244	-	80.532	+	18.9	))
=	783.396

	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	))
=	730.709	-	24.894	-	( 18.591	-	max(0, 102.377	-	76.324	+	18.591	))
=	731.868

Palestine Development & Investment Co'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 )
=	9.616 * ( 1 - 10.87% )	/	( (730.02	+	730.59)	/ 2 )
=	8.5707408	/	730.305
=	1.17 %

where

	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	))
=	726.085	-	13.239	-	( 32.348	-	max(0, 109.889	-	92.715	+	32.348	))
=	730.02

	Invested Capital		(Q: Sep. 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	))
=	720.522	-	12.318	-	( 26.488	-	max(0, 107.752	-	85.366	+	26.488	))
=	730.59

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

Palestine Development & Investment Co (XPAE:PADICO) 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, Palestine Development & Investment Co's WACC % is 7.77%. Palestine Development & Investment Co's ROIC % is 0.78% (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.

Palestine Development & Investment Co ROIC % Related Terms

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Palestine Development & Investment Co Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Financial Services » Asset Management » Palestine Development & Investment Co (XPAE:PADICO) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

P.O.Box 6181, Amman, JOR, 11118

Website

https://www.padico.com

Palestine Development & Investment Co is an investment and development company. It invests in real estate, telecommunications, tourism, industry, agriculture, infrastructure, financial services, and the environment sectors. The company's objective is to develop and encourage investment in various sectors and technical and consultancy services through the establishment of companies, joint ventures, and associations with other companies. The firm's investment strategy is based on sector diversification, long-term investment, and well-founded partnerships. It classifies its investments in subsidiary companies, affiliated companies, and other investments.

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