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Hisense Visual Technology Co (SHSE:600060) ROIC % : 13.92% (As of Mar. 2024)


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What is Hisense Visual Technology 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 %. Hisense Visual Technology Co's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was 13.92%.

As of today (2024-05-25), Hisense Visual Technology Co's WACC % is 8.85%. Hisense Visual Technology Co's ROIC % is 14.61% (calculated using TTM income statement data). Hisense Visual Technology Co 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.


Hisense Visual Technology Co ROIC % Historical Data

The historical data trend for Hisense Visual Technology 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.

* Premium members only.

Hisense Visual Technology Co ROIC % Chart

Hisense Visual Technology Co 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 6.38 12.65 11.97 17.77 17.16

Hisense Visual Technology Co 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 19.26 11.55 18.87 13.19 13.92

Competitive Comparison of Hisense Visual Technology Co's ROIC %

For the Consumer Electronics subindustry, Hisense Visual Technology 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.


Hisense Visual Technology Co's ROIC % Distribution in the Hardware Industry

For the Hardware industry and Technology sector, Hisense Visual Technology Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Hisense Visual Technology Co's ROIC % falls into.



Hisense Visual Technology Co ROIC % Calculation

Hisense Visual Technology 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 )
=2288.201 * ( 1 - 8.33% )/( (9883.703 + 14563.991)/ 2 )
=2097.5938567/12223.847
=17.16 %

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))
=35759.553 - 13976.358 - ( 11899.492 - max(0, 15156.33 - 29294.146+11899.492))
=9883.703

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))
=45106.594 - 15736.832 - ( 14805.771 - max(0, 18381.722 - 35455.984+14805.771))
=14563.991

Hisense Visual Technology Co'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 )
=2206.208 * ( 1 - 11.06% )/( (14563.991 + 13618.903)/ 2 )
=1962.2013952/14091.447
=13.92 %

where

Invested Capital(Q: 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))
=45106.594 - 15736.832 - ( 14805.771 - max(0, 18381.722 - 35455.984+14805.771))
=14563.991

Invested Capital(Q: Mar. 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))
=42844.265 - 14596.771 - ( 14628.591 - max(0, 16035.805 - 33360.873+14628.591))
=13618.903

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.


Hisense Visual Technology Co  (SHSE:600060) 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, Hisense Visual Technology Co's WACC % is 8.85%. Hisense Visual Technology Co's ROIC % is 14.61% (calculated using TTM income statement data). Hisense Visual Technology Co 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. Hisense Visual Technology Co 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.


Hisense Visual Technology Co ROIC % Related Terms

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Hisense Visual Technology Co (SHSE:600060) Business Description

Traded in Other Exchanges
N/A
Address
No.218, Qian Wangang Road, Economic and Technological Development Zone, Shandong Province, Qingdao, CHN, 266555
Hisense Visual Technology Co Ltd is engaged in the distribution and servicing of home appliances, telecommunications, green energy-saving refrigeration technology, and information technologies. Its brand includes Kelon, Ronshen, Vidaa among others.
Executives
Li Jia senior management
Yu Zhi Tao Directors, senior managers
Liu Sha Sha senior management
Cheng Kai Xun Director
Wu Hai Yan senior management
Lin Lan Director
Dai Hui Zhong Director
Zhou Hou Jian Director
Xia Feng senior management
Liu Jiang Yan senior management
Tian Ye Director
Yu Shu Min Director
Liu Hong Xin Director
Mi Liang Yuan senior management
Liu Xin senior management

Hisense Visual Technology Co (SHSE:600060) Headlines

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