What is Natural Alternatives International 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 %. Natural Alternatives International's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was -8.58%.
As of today (2024-04-27), Natural Alternatives International's WACC % is 3.30%. Natural Alternatives International's ROIC % is -2.42% (calculated using TTM income statement data).
Natural Alternatives International earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Natural Alternatives International ROIC % Historical 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.
Competitive Comparison of Natural Alternatives International's ROIC %
For the Packaged Foods subindustry, Natural Alternatives International'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.
Natural Alternatives International's ROIC % Distribution in the Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, Natural Alternatives International's ROIC % distribution charts can be found below:
* The bar in red indicates where Natural Alternatives International's ROIC % falls into.
Natural Alternatives International ROIC % Calculation
Natural Alternatives International's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jun. 2023 is calculated as:
Note:
The Operating Income data used here is four times the quarterly (Dec. 2023) 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.
Natural Alternatives International (NAS:NAII) 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, Natural Alternatives International's WACC % is 3.30%. Natural Alternatives International's ROIC % is -2.42% (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.
Natural Alternatives International ROIC % Related Terms
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Natural Alternatives International (Natural Alternatives International) Business Description
Natural Alternatives International Inc is engaged in formulating, manufacturing, and marketing nutritional supplements. It offers vitamins, minerals, herbs, and other supplements, as well as other healthcare products to customers within the United States and internationally. Its business activity is operated through Private-Label Contract Manufacturing and Patent & Trademark Licensing segment. The company derives the majority of revenue from Private-Label Contract Manufacturing which is engaged in providing manufacturing services to companies that market and distribute nutritional supplements and other healthcare products, whereas the Patent and Trademark Licensing segment includes royalty income from its license and supply agreements associated with the sale.
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