ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Msg Life AG's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2022 was 15.91%.
As of today (2024-05-18), Msg Life AG's WACC % is 2.50%. Msg Life AG's ROIC % is 15.91% (calculated using TTM income statement data).
Msg Life AG 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.
Msg Life AG ROIC % Historical Data
The historical data trend for Msg Life 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.
For the Software - Application subindustry, Msg Life 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.
Msg Life AG's ROIC % Distribution in the Software Industry
For the Software industry and Technology sector, Msg Life AG's ROIC % distribution charts can be found below:
* The bar in red indicates where Msg Life AG's ROIC % falls into.
Msg Life AG ROIC % Calculation
Msg Life AG's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2022 is calculated as:
Note:
The Operating Income data used here is one times the annual (Dec. 2022) 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.
Msg Life AG (HAM:MSGL) 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, Msg Life AG's WACC % is 2.50%. Msg Life AG's ROIC % is 15.91% (calculated using TTM income statement data).
Msg Life AG 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.
Msg Life AG 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.
Msg Life AG ROIC % Related Terms
Thank you for viewing the detailed overview of Msg Life AG's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Msg Life AG is a Germany-based company. It is a consultant and software company for the insurance and retirement savings market. It is a provider of software, advice, and cloud solutions for life insurance companies and pension fund institutions in Europe and, in particular, health insurance companies in the United States. The company's products and services include msg. Life Factory, msg.Insurance Suite, msg.Migration System, msg.Health Factory, msg.The commission, msg.Business Partner, msg.Billing, and others. Geographically, the company exports its services to the United States of America, Austria, Switzerland, Slovenia, Portugal, Poland, and Benelux.
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