Media Investment Optimization (XMAD:MIO) ROC % : 0.80% (As of Dec. 2023)

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What is Media Investment Optimization 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 %. Media Investment Optimization's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 0.80%.

As of today (2024-05-15), Media Investment Optimization's WACC % is 8.44%. Media Investment Optimization's ROC % is 1.39% (calculated using TTM income statement data). Media Investment Optimization earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Media Investment Optimization ROC % Historical Data

The historical data trend for Media Investment Optimization'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.

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Media Investment Optimization ROC % Chart

Media Investment Optimization Annual Data

Trend

Dec20

Dec21

Dec22

Dec23

ROC %

7.54

11.93

6.57

1.36

Media Investment Optimization Semi-Annual Data
	Dec20	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial			-	8.72	4.81	1.94	0.80

Media Investment Optimization ROC % Calculation

Media Investment Optimization'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 )
=	0.322 * ( 1 - -20.16% )	/	( (24.668	+	32.224)	/ 2 )
=	0.3869152	/	28.446
=	1.36 %

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	))
=	36.656	-	14.811	-	( 6.849	-	max(0, 23.849	-	21.026	+	6.849	))
=	24.668

	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	))
=	35.165	-	9.671	-	( 8.059	-	max(0, 28.828	-	22.098	+	8.059	))
=	32.224

Media Investment Optimization'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 )
=	0.19 * ( 1 - -22.71% )	/	( (26.362	+	32.224)	/ 2 )
=	0.233149	/	29.293
=	0.80 %

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	))
=	36.452	-	14.173	-	( 7.766	-	max(0, 25.35	-	21.267	+	7.766	))
=	26.362

	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	))
=	35.165	-	9.671	-	( 8.059	-	max(0, 28.828	-	22.098	+	8.059	))
=	32.224

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

Media Investment Optimization (XMAD:MIO) 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, Media Investment Optimization's WACC % is 8.44%. Media Investment Optimization's ROC % is 1.39% (calculated using TTM income statement data). Media Investment Optimization 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 %, 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.

Media Investment Optimization ROC % Related Terms

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Media Investment Optimization (XMAD:MIO) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Communication Services » Media - Diversified » Media Investment Optimization SA (XMAD:MIO) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

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Address

Paseo Castellana 95 Pl 24, Torre Europa Building, Madrid, ESP, 28046

Website

https://www.mio.es

Media Investment Optimization SA is a consultancy company in the integration of marketing services and digital transformation, oriented to provide an impact on the income statement of its clients, through the use of technology. It is made up of different companies specialized in the fields of marketing and advertising: creativity, media buying, data analytics, social media, web development, marketing automation and technology.