Artificial Intelligence Technology Solutions (Artificial Intelligence Technology Solutions) ROIC % : -51.07% (As of Nov. 2023)

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What is Artificial Intelligence Technology Solutions 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 %. Artificial Intelligence Technology Solutions's annualized return on invested capital (ROIC %) for the quarter that ended in Nov. 2023 was -51.07%.

As of today (2024-05-12), Artificial Intelligence Technology Solutions's WACC % is 19.08%. Artificial Intelligence Technology Solutions's ROIC % is -75.38% (calculated using TTM income statement data). Artificial Intelligence Technology Solutions earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Artificial Intelligence Technology Solutions ROIC % Historical Data

The historical data trend for Artificial Intelligence Technology Solutions'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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Artificial Intelligence Technology Solutions ROIC % Chart

Artificial Intelligence Technology Solutions Annual Data

Trend

Feb14

Feb15

Feb16

Feb17

Feb18

Feb19

Feb20

Feb21

Feb22

Feb23

ROIC %

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-14.24

-12.34

-31.24

-371.01

-141.88

Artificial Intelligence Technology Solutions Quarterly Data
	Feb19	May19	Aug19	Nov19	Feb20	May20	Aug20	Nov20	Feb21	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Feb23	May23	Aug23	Nov23
ROIC %	Get a 7-Day Free Trial															-250.39	-135.30	-68.68	-54.74	-51.07

Competitive Comparison of Artificial Intelligence Technology Solutions's ROIC %

For the Computer Hardware subindustry, Artificial Intelligence Technology Solutions'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.

Artificial Intelligence Technology Solutions's ROIC % Distribution in the Hardware Industry

For the Hardware industry and Technology sector, Artificial Intelligence Technology Solutions's ROIC % distribution charts can be found below:

* The bar in red indicates where Artificial Intelligence Technology Solutions's ROIC % falls into.

Artificial Intelligence Technology Solutions ROIC % Calculation

Artificial Intelligence Technology Solutions's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Feb. 2023 is calculated as:

	ROIC % (A: Feb. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Feb. 2022 )	+	Invested Capital (A: Feb. 2023 ))	/ count )
=	-12.691 * ( 1 - 0% )	/	( (4.067	+	13.823)	/ 2 )
=	-12.691	/	8.945
=	-141.88 %

where

	Invested Capital		(A: Feb. 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	))
=	9.279	-	2.71	-	( 4.648	-	max(0, 4.548	-	7.05	+	4.648	))
=	4.067

	Invested Capital		(A: Feb. 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	))
=	6.297	-	5.085	-	( 0.94	-	max(0, 16.05	-	3.439	+	0.94	))
=	13.823

Artificial Intelligence Technology Solutions's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Nov. 2023 is calculated as:

	ROIC % (Q: Nov. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Aug. 2023 )	+	Invested Capital (Q: Nov. 2023 ))	/ count )
=	-9.54 * ( 1 - 0% )	/	( (23.977	+	13.382)	/ 2 )
=	-9.54	/	18.6795
=	-51.07 %

where

	Invested Capital		(Q: Aug. 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	))
=	7.47	-	8.109	-	( 1.512	-	max(0, 28.754	-	4.138	+	1.512	))
=	23.977

	Invested Capital		(Q: Nov. 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	))
=	7.136	-	6.699	-	( 0.097	-	max(0, 16.459	-	3.514	+	0.097	))
=	13.382

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

Artificial Intelligence Technology Solutions (OTCPK:AITX) 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, Artificial Intelligence Technology Solutions's WACC % is 19.08%. Artificial Intelligence Technology Solutions's ROIC % is -75.38% (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.

Artificial Intelligence Technology Solutions ROIC % Related Terms

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Artificial Intelligence Technology Solutions (Artificial Intelligence Technology Solutions) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Hardware » Artificial Intelligence Technology Solutions Inc (OTCPK:AITX) » Definitions » ROIC %

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Address

10800 Galaxie Avenue, Ferndale, MI, USA, 48220

Website

https://aitx.ai

Artificial Intelligence Technology Solutions Inc through its wholly-owned subsidiary delivers robotics and artificial intelligence-based solutions for operational, security, and monitoring needs. It also creates its own software leading to the development of powerful tools such as RADSOC, RADPMC, and RADGuard.