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RWE AG (XTER:RWE) ROIC % : 8.74% (As of Mar. 2024)


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What is RWE AG 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 %. RWE AG's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was 8.74%.

As of today (2024-06-23), RWE AG's WACC % is 5.93%. RWE AG's ROIC % is -0.03% (calculated using TTM income statement data). RWE AG earns returns that do not match up to its cost of capital. It will destroy value as it grows.


RWE AG ROIC % Historical Data

The historical data trend for RWE AG'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.

RWE AG ROIC % Chart

RWE AG 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 -2.14 -2.74 1.05 -1.74 -0.15

RWE AG Quarterly Data
Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24
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 6.63 0.45 7.31 -105.84 8.74

Competitive Comparison of RWE AG's ROIC %

For the Utilities - Diversified subindustry, RWE AG'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.


RWE AG's ROIC % Distribution in the Utilities - Regulated Industry

For the Utilities - Regulated industry and Utilities sector, RWE AG's ROIC % distribution charts can be found below:

* The bar in red indicates where RWE AG's ROIC % falls into.



RWE AG ROIC % Calculation

RWE AG'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 )
=-367 * ( 1 - 60.13% )/( (114170 + 86188)/ 2 )
=-146.3229/100179
=-0.15 %

where

RWE AG's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Mar. 2024 is calculated as:

ROIC % (Q: Mar. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Dec. 2023 ) + Invested Capital (Q: Mar. 2024 ))/ count )
=9504 * ( 1 - 19.87% )/( (86188 + 88129)/ 2 )
=7615.5552/87158.5
=8.74 %

where

Note: The Operating Income data used here is four times the quarterly (Mar. 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.


RWE AG  (XTER:RWE) 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, RWE AG's WACC % is 5.93%. RWE AG's ROIC % is -0.03% (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.


RWE AG ROIC % Related Terms

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RWE AG (XTER:RWE) Business Description

Address
RWE Platz 1, Essen, NW, DEU, 45141
Since the deal with E.On, RWE is refocused on power generation, mostly in Europe. It owns 38 gigawatts of power generation capacity: 28% from lignite and hard coal plants, 37% from gas plants, 40% from renewables including pumped storage and batteries. Besides Germany, RWE's power plants are chiefly located in the United Kingdom, the Netherlands, Turkey, and the United States for many onshore wind farms.
Executives
Helle Valentin Supervisory Board
Ullrich Sierau Supervisory Board
Mag. Dr. H.c. Monika Kircher Supervisory Board
Dr. Hans-peter Keitel Supervisory Board
Dr. Markus Krebber Board of Directors
Dr. Michael Müller Board of Directors
Zvezdana Seeger Board of Directors
Dr. Werner Brandt Supervisory Board
Ute Gerbaulet Supervisory Board
Dr. Erhard Schipporeit Supervisory Board
Hauke Stars Supervisory Board
Dr. Andreas Wagner Supervisory Board
Dr. Rolf Martin Schmitz Board of Directors
Dagmar Mühlenfeld Supervisory Board
Peter Ottmann Supervisory Board

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