Air Liquide (XPAR:AI) ROC % : 8.66% (As of Dec. 2023)

View and export this data going back to 1989. Start your Free Trial

What is Air Liquide ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Air Liquide's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 8.66%.

As of today (2024-04-27), Air Liquide's WACC % is 7.53%. Air Liquide's ROC % is 8.55% (calculated using TTM income statement data). Air Liquide 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.

Air Liquide ROC % Historical Data

The historical data trend for Air Liquide's ROC % 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.

Air Liquide ROC % Chart

Air Liquide Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

Get a 7-Day Free Trial

7.12

7.51

7.60

8.27

8.70

Air Liquide Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial															7.64	7.59	8.23	8.28	8.66

Air Liquide ROC % Calculation

Air Liquide's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	5068 * ( 1 - 23.39% )	/	( (44714.7	+	44518.5)	/ 2 )
=	3882.5948	/	44616.6
=	8.70 %

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	))
=	49518	-	5461.3	-	( 1756.4	-	max(0, 8896.2	-	8238.2	+	1756.4	))
=	44714.7

	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	))
=	48332.4	-	4942.3	-	( 1478.9	-	max(0, 8846	-	7717.6	+	1478.9	))
=	44518.5

Air Liquide's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	5174.6 * ( 1 - 23.38% )	/	( (47066.4	+	44518.5)	/ 2 )
=	3964.77852	/	45792.45
=	8.66 %

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	))
=	48556.2	-	3545.3	-	( 1712.2	-	max(0, 9838.6	-	7783.1	+	1712.2	))
=	47066.4

	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	))
=	48332.4	-	4942.3	-	( 1478.9	-	max(0, 8846	-	7717.6	+	1478.9	))
=	44518.5

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

Air Liquide (XPAR:AI) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. 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 ROC % 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, Air Liquide's WACC % is 7.53%. Air Liquide's ROC % is 8.55% (calculated using TTM income statement data). Air Liquide 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.

Be Aware

Like ROE % and ROA %, ROC % 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.

Air Liquide ROC % Related Terms

Thank you for viewing the detailed overview of Air Liquide's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.

Air Liquide (XPAR:AI) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Chemicals » Air Liquide SA (XPAR:AI) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

AIQUY:USA AIQUF:USA AI N:Mexico AIp:UK 0NWF:UK AIL:Germany AI:Austria

Address

75, Quai d'Orsay, Paris, FRA, 75007

Website

https://www.airliquide.com

Founded in 1902, Air Liquide is one of the leading industrial gas companies in the world, serving over 3.8 million customers in 78 countries. The company generated approximately EUR 29.9 billion of revenue in 2022, serving a wide range of industries, including chemicals, energy, healthcare, food and beverage, and electronics. The healthcare division serves around 1.8 million patients and 15,000 hospitals and clinics annually. Air Liquide employs approximately 65,000 people.