ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Indian Sucrose's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was 29.85%.
As of today (2024-06-10), Indian Sucrose's WACC % is 8.52%. Indian Sucrose's ROIC % is 9.90% (calculated using TTM income statement data).
Indian Sucrose 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.
Indian Sucrose ROIC % Historical Data
The historical data trend for Indian Sucrose'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.
For the Confectioners subindustry, Indian Sucrose'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.
Indian Sucrose's ROIC % Distribution in the Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, Indian Sucrose's ROIC % distribution charts can be found below:
* The bar in red indicates where Indian Sucrose's ROIC % falls into.
Indian Sucrose ROIC % Calculation
Indian Sucrose's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Mar. 2024 is calculated as:
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.
Indian Sucrose (BOM:500319) 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, Indian Sucrose's WACC % is 8.52%. Indian Sucrose's ROIC % is 9.90% (calculated using TTM income statement data).
Indian Sucrose 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.
Indian Sucrose 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.
Indian Sucrose ROIC % Related Terms
Thank you for viewing the detailed overview of Indian Sucrose's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Indian Sucrose Ltd is engaged in the manufacturing of sugar and allied products. The core business segments of the company comprise of the Sugar and Cogeneration of Power. Its products portfolio consists of sugar, molasses, and Bagasse. The sugar segment revenues constituted the major share of the company's revenues.
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