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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 %. Neonode's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was -844.62%.
As of today (2024-05-02), Neonode's WACC % is 6.39%. Neonode's ROIC % is -271.12% (calculated using TTM income statement data). Neonode earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The historical data trend for Neonode'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.
Neonode Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
ROIC % | Get a 7-Day Free Trial | -143.44 | -196.66 | -214.64 | -129.93 | -360.99 |
Neonode Quarterly Data | ||||||||||||||||||||
Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | |
ROIC % | Get a 7-Day Free Trial | -101.86 | -125.78 | -143.75 | -135.57 | -844.62 |
For the Electronic Components subindustry, Neonode'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 Hardware industry and Technology sector, Neonode's ROIC % distribution charts can be found below:
* The bar in red indicates where Neonode's ROIC % falls into.
Neonode'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 ) |
= | -10.744 * ( 1 - -1.15% ) | / | ( (4.897 | + | 1.124) | / 2 ) |
= | -10.867556 | / | 3.0105 | |||
= | -360.99 % |
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 | )) |
= | 21.198 | - | 1.485 | - | ( 14.816 | - | max(0, 1.699 | - | 20.798 | + | 14.816 | )) |
= | 4.897 |
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 | )) |
= | 19.014 | - | 1.735 | - | ( 16.155 | - | max(0, 1.832 | - | 18.62 | + | 16.155 | )) |
= | 1.124 |
Neonode's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2023 is calculated as:
ROIC % (Q: Dec. 2023 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Sep. 2023 ) | + | Invested Capital (Q: Dec. 2023 )) | / count ) |
= | -24.352 * ( 1 - -0.34% ) | / | ( (4.662 | + | 1.124) | / 2 ) |
= | -24.4347968 | / | 2.893 | |||
= | -844.62 % |
where
Invested Capital | (Q: Sep. 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 | )) |
= | 24.817 | - | 1.684 | - | ( 18.471 | - | max(0, 1.813 | - | 24.463 | + | 18.471 | )) |
= | 4.662 |
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 | )) |
= | 19.014 | - | 1.735 | - | ( 16.155 | - | max(0, 1.832 | - | 18.62 | + | 16.155 | )) |
= | 1.124 |
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.
Neonode (NAS:NEON) 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, Neonode's WACC % is 6.39%. Neonode's ROIC % is -271.12% (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 Neonode's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Cecilia Edstrom | director | KARLAVAGEN 100, STOCKHOLM V7 115 26 |
Fredrik Nihlen | officer: Chief Financial Officer | C/O NEONODE, INC.,. 100 KARLAVAGEN, STOCKHOLM V7 115 26 |
Urban Forssell | officer: Chief Executive Officer | C/O NEONODE, STORGATAN 23C, STOCKHOLM V7 11455 |
Mattias Bergman | director | C/O NEONODE, INC., STORGATAN 23C, STOCKHOLM V7 114 55 |
Ek Maria Anne-lee Charlotte | officer: Chief Financial Officer | C/O NEONODE, INC., STORGATAN 23C, STOCKHOLM V7 114 55 |
Ulf Rosberg | director | FAFNERVAEGEN 2, DJURSHOLM V7 18266 |
Hakan Persson | officer: Chief Executive Officer | C/O NEONODE INC., STORGATAN 23C, STOCKHOLM V7 114 55 |
Andreas Bunge | director | DRAGARSTIGEN 3, SALTSJOBADEN V7 133 36 |
Peter Lindell | 10 percent owner | LILLA ERSTAGATAN 6, STOCKHOLM V7 116 28 |
Lars, Goran Lindqvist | director | ZUGERSTRASSE 20, UNTERAEGERI V8 6314 |
Asa Hedin | director | MORABERGSVAGEN 27, SALTSJOBADEN V7 133 33 |
Per Eriksson | director | VILDVINSVAGEN 5, SALTSJOBADEN V7 S-133 36 |
Bjorn Thomas Eriksson | officer: Vice President | STORANGSSTIGEN 15 C, STOCKSUND V7 18274 |
Mats Dahlin | director | LORETOHOHE 1, ZUG V8 6300 |
Bystedt Per Ivar Gosta | director | DJURGARDSVAGEN 144, STOCKHOLM V7 SE 115 21 |
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