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ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Tile Shop Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was 2.68%.
As of today (2024-06-05), Tile Shop Holdings's WACC % is 8.13%. Tile Shop Holdings's ROIC % is 3.74% (calculated using TTM income statement data). Tile Shop Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The historical data trend for Tile Shop Holdings'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.
Tile Shop Holdings Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
ROIC % | Get a 7-Day Free Trial | -0.38 | 2.54 | 5.14 | 5.67 | 3.98 |
Tile Shop Holdings 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 | 4.17 | 7.84 | 3.19 | 1.11 | 2.68 |
For the Home Improvement Retail subindustry, Tile Shop Holdings'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.
For the Retail - Cyclical industry and Consumer Cyclical sector, Tile Shop Holdings's ROIC % distribution charts can be found below:
* The bar in red indicates where Tile Shop Holdings's ROIC % falls into.
Tile Shop Holdings'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 ) |
= | 16.158 * ( 1 - 28.03% ) | / | ( (308.039 | + | 275.92) | / 2 ) |
= | 11.6289126 | / | 291.9795 | |||
= | 3.98 % |
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 | )) |
= | 345.822 | - | 31.835 | - | ( 5.948 | - | max(0, 83.291 | - | 146.403 | + | 5.948 | )) |
= | 308.039 |
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 | )) |
= | 316.672 | - | 32.132 | - | ( 8.62 | - | max(0, 78.745 | - | 114.558 | + | 8.62 | )) |
= | 275.92 |
Tile Shop Holdings'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 ) |
= | 9.132 * ( 1 - 20.22% ) | / | ( (275.92 | + | 268.475) | / 2 ) |
= | 7.2855096 | / | 272.1975 | |||
= | 2.68 % |
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 | )) |
= | 316.672 | - | 32.132 | - | ( 8.62 | - | max(0, 78.745 | - | 114.558 | + | 8.62 | )) |
= | 275.92 |
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 | )) |
= | 325.922 | - | 33.42 | - | ( 24.027 | - | max(0, 87.683 | - | 126.668 | + | 24.027 | )) |
= | 268.475 |
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.
Tile Shop Holdings (NAS:TTSH) 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, Tile Shop Holdings's WACC % is 8.13%. Tile Shop Holdings's ROIC % is 3.74% (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.
Thank you for viewing the detailed overview of Tile Shop Holdings's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Fund 1 Investments, Llc | 10 percent owner | 100 CARR 115, UNIT 1900, RINCON PR 00677 |
Mark Burton Davis | officer: VP Inv. Relations & CAO | C/O 14000 CARLSON PARKWAY, PLYMOUTH MN 55441 |
Pleasant Lake Partners Llc | 10 percent owner | 100 CARR 115 UNIT 1900, RINCON PR 00677 |
Karla Lunan | officer: Chief Financial Officer | C/O TILE SHOP HOLDINGS, INC., 14000 CARLSON PKWY., PLYMOUTH MN 55441 |
Deborah K Glasser | director | C/O TILE SHOP HOLDINGS, INC., 14000 CARLSON PARKWAY, PLYMOUTH MN 55441 |
Linda Solheid | director | C/O TILE SHOP HOLDINGS, INC., 14000 CARLSON PARKWAY, PLYMOUTH MN 55441 |
Robert A Rucker | director, 10 percent owner, officer: Chief Executive Officer | 14000 CARLSON PARKWAY, PLYMOUTH MN 55441 |
Philip B Livingston | director | 1241 EAST MAIN ST, STAMFORD CT 06902 |
Brc Partners Opportunity Fund, Lp | other: See Remarks | 11100 SANTA MONICA BLVD. SUITE 800, LOS ANGELES CA 90025 |
B. Riley Financial, Inc. | other: See Remarks | 11100 SANTA MONICA BLVD, SUITE 800, LOS ANGELES CA 90025 |
272 Capital Lp | 10 percent owner | 3811 TURTLE CREEK BLVD, SUITE 2100, DALLAS TX 75219 |
Bryant R Riley | other: See Remarks | C/O B. RILEY FINANCIAL, INC., 21255 BURBANK BLVD, SUITE 400, WOODLAND HILLS CA 91367 |
Wes Cummins | 10 percent owner | 4505 LORRAINE AVE, DALLAS TX 75205 |
B. Riley Securities, Inc. | other: See Remarks | 11100 SANTA MONICA BLVD, SUITE 800, LOS ANGELES CA 90025 |
B. Riley Capital Management, Llc | other: See Remarks | 11100 SANTA MONICA BLVD., SUITE 800, LOS ANGELES CA 90025 |
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