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Varta AG (XTER:VAR1) ROIC % : -20.71% (As of Sep. 2023)


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What is Varta 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 %. Varta AG's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2023 was -20.71%.

As of today (2024-05-14), Varta AG's WACC % is 18.42%. Varta AG's ROIC % is -8.41% (calculated using TTM income statement data). Varta AG earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Varta AG ROIC % Historical Data

The historical data trend for Varta 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.

Varta AG ROIC % Chart

Varta AG Annual Data
Trend Dec09 Dec10 Dec11 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 14.42 17.61 16.20 13.69 -2.21

Varta AG Quarterly Data
Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23
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 -9.89 -3.84 -9.32 -7.78 -20.71

Competitive Comparison of Varta AG's ROIC %

For the Electrical Equipment & Parts subindustry, Varta 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.


Varta AG's ROIC % Distribution in the Industrial Products Industry

For the Industrial Products industry and Industrials sector, Varta AG's ROIC % distribution charts can be found below:

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



Varta AG ROIC % Calculation

Varta AG's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2022 is calculated as:

ROIC % (A: Dec. 2022 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2021 ) + Invested Capital (A: Dec. 2022 ))/ count )
=-27.585 * ( 1 - -1.13% )/( (1098.518 + 1424.367)/ 2 )
=-27.8967105/1261.4425
=-2.21 %

where

Invested Capital(A: Dec. 2021 )
=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))
=1260.402 - 145.783 - ( 73.215 - max(0, 427.76 - 443.861+73.215))
=1098.518

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))
=1258.454 - 147.807 - ( 109.384 - max(0, 822.954 - 509.234+109.384))
=1424.367

Varta AG's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2023 is calculated as:

ROIC % (Q: Sep. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jun. 2023 ) + Invested Capital (Q: Sep. 2023 ))/ count )
=-128.66 * ( 1 - -65.08% )/( (1027.548 + 1023.845)/ 2 )
=-212.391928/1025.6965
=-20.71 %

where

Invested Capital(Q: Jun. 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))
=1137.973 - 104.581 - ( 54.099 - max(0, 408.495 - 414.339+54.099))
=1027.548

Invested Capital(Q: Sep. 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))
=1145.801 - 120.403 - ( 39.962 - max(0, 421.384 - 422.937+39.962))
=1023.845

Note: The Operating Income data used here is four times the quarterly (Sep. 2023) 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.


Varta AG  (XTER:VAR1) 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, Varta AG's WACC % is 18.42%. Varta AG's ROIC % is -8.41% (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.


Varta AG ROIC % Related Terms

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Varta AG (XTER:VAR1) Business Description

Traded in Other Exchanges
Address
VARTA-Platz 1, Ellwangen, BW, DEU, 73479
Varta AG manufactures and markets a wide range of industrial, commercial, and miniaturized batteries for equipment and devices. It operates in five reportable business segments: Micro Batteries, Lithium-Ion CoinPower, Consumer Batteries, Energy Storage Systems, and Others. The company generates the majority of its revenue from the Consumer Batteries segment which comprises the product categories of household comprises the product categories of household batteries, rechargeable batteries, chargers, portable power (power banks), and lights.
Executives
Rainer Hald Board of Directors
Martin Ohneberg Supervisory Board
Ddr. Michael Tojner Supervisory Board
Dr. Markus Hackstein Board of Directors
Dr. Michael Pistauer Supervisory Board
Herbert Schein Board of Directors
Armin Hessenberger Board of Directors

Varta AG (XTER:VAR1) Headlines

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