REE Automotive (REE Automotive) ROIC % : -260.60% (As of Dec. 2023)

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What is REE Automotive 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 %. REE Automotive's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was -260.60%.

As of today (2024-04-27), REE Automotive's WACC % is 6.77%. REE Automotive's ROIC % is -115.63% (calculated using TTM income statement data). REE Automotive earns returns that do not match up to its cost of capital. It will destroy value as it grows.

REE Automotive ROIC % Historical Data

The historical data trend for REE Automotive'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.

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REE Automotive ROIC % Chart

REE Automotive Annual Data

Trend

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

-4,826.22

-16,471.23

-456.83

-208.02

REE Automotive Quarterly Data
	Dec19	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Jun23	Sep23	Dec23
ROIC %	Get a 7-Day Free Trial										-342.23	-222.69	-	-207.02	-260.60

Competitive Comparison of REE Automotive's ROIC %

For the Recreational Vehicles subindustry, REE Automotive'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.

REE Automotive's ROIC % Distribution in the Vehicles & Parts Industry

For the Vehicles & Parts industry and Consumer Cyclical sector, REE Automotive's ROIC % distribution charts can be found below:

* The bar in red indicates where REE Automotive's ROIC % falls into.

REE Automotive ROIC % Calculation

REE Automotive'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 )
=	-119.892 * ( 1 - 1.18% )	/	( (52.086	+	61.826)	/ 2 )
=	-118.4772744	/	56.956
=	-208.02 %

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	))
=	215.013	-	17.29	-	( 153.619	-	max(0, 20.038	-	165.675	+	153.619	))
=	52.086

	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	))
=	137.9	-	17.749	-	( 85.627	-	max(0, 35.179	-	93.504	+	85.627	))
=	61.826

REE Automotive'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 )
=	-148.68 * ( 1 - 3.29% )	/	( (48.524	+	61.826)	/ 2 )
=	-143.788428	/	55.175
=	-260.60 %

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	))
=	147.905	-	18.67	-	( 86.117	-	max(0, 21.336	-	102.047	+	86.117	))
=	48.524

	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	))
=	137.9	-	17.749	-	( 85.627	-	max(0, 35.179	-	93.504	+	85.627	))
=	61.826

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

REE Automotive (NAS:REE) 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, REE Automotive's WACC % is 6.77%. REE Automotive's ROIC % is -115.63% (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.

REE Automotive ROIC % Related Terms

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REE Automotive (REE Automotive) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » REE Automotive Ltd (NAS:REE) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

Kibbutz Glil-Yam, Herzliya, ISR, 4690500

Website

https://www.ree.auto

REE Automotive Ltd is a technology company whose mission is to be the cornerstone for zero-emission electric and autonomous vehicles. Company aims to empower the companies, such as original equipment manufacturers, or OEMs, delivery and logistics fleets, dealers, e-commerce retailers, new mobility players, Mobility-as-a-Service providers and autonomous drive companies, in the build-out of any size or shape of electric or autonomous vehicle - from Class 1 through Class 6, focusing primarily on Class 3 through 5 platform models on the P7 EV platform. Geographical preference in Israel, Germany, Norway, U.S, and Rest of the world.

Executives

David Weisburd	other: Member of Sponsor	1 WORLD TRADE CENTER, FLOOR 85, NEW YORK NY 10007
Hans Thomas	director	1 WORLD TRADE CENTER, FLOOR 85, NEW YORK NY 10007