ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Nitori Holdings Co's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 11.76%.
As of today (2024-04-27), Nitori Holdings Co's WACC % is 3.59%. Nitori Holdings Co's ROIC % is 6.77% (calculated using TTM income statement data).
Nitori Holdings Co 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.
Nitori Holdings Co ROIC % Historical Data
The historical data trend for Nitori Holdings Co'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.
Competitive Comparison of Nitori Holdings Co's ROIC %
For the Furnishings, Fixtures & Appliances subindustry, Nitori Holdings Co'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.
Nitori Holdings Co's ROIC % Distribution in the Furnishings, Fixtures & Appliances Industry
For the Furnishings, Fixtures & Appliances industry and Consumer Cyclical sector, Nitori Holdings Co's ROIC % distribution charts can be found below:
* The bar in red indicates where Nitori Holdings Co's ROIC % falls into.
Nitori Holdings Co ROIC % Calculation
Nitori Holdings Co's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Feb. 2022 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.
Nitori Holdings Co (TSE:9843) 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, Nitori Holdings Co's WACC % is 3.59%. Nitori Holdings Co's ROIC % is 6.77% (calculated using TTM income statement data).
Nitori Holdings Co 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.
Nitori Holdings Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
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.
Nitori Holdings Co ROIC % Related Terms
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Nitori Holdings Co (TSE:9843) Business Description
Nitori Holdings Co Ltd is a Japanese holding company engaged in the sale of furniture and interior goods. It primarily operates home furnishing and fashion stores, along with other ventures such as the Nitori Mall and Corporate Enterprise, which focuses on corporate customers. It conducts these operations and more through its subsidiaries. The firm's products include bedding, curtains, cookware, tableware, tables, desks, and sofas. Nitori's operations are divided among manufacturing, trading company and logistics (which deals with imports and distribution centers), sales, and advertisement and publicity. Aside from its presence across Japan, the company operates in California, China, Huizhou, Indonesia, Shanghai, and Vietnam.
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