Applied Digital (Applied Digital) ROIC % : -20.01% (As of Feb. 2024)

Applied Digital ROIC % Chart

Applied Digital Annual Data
	Trend	May03	May04	May05	May06	May07	May08	May20	May21	May22	May23
ROIC %		Get a 7-Day Free Trial					-1,189.49	-	-9.06	-42.49	-21.11

Applied Digital Quarterly Data
	May08	Aug08	Nov08	Feb09	May20	Aug20	Nov20	Feb21	May21	Aug21	Nov21	Feb22	May22	Aug22	Nov22	Feb23	May23	Aug23	Nov23	Feb24
ROIC %	Get a 7-Day Free Trial															-11.53	-8.05	-5.43	-6.25	-20.01

Competitive Comparison of Applied Digital's ROIC %

For the Capital Markets subindustry, Applied Digital'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.

Applied Digital's ROIC % Distribution in the Capital Markets Industry

For the Capital Markets industry and Financial Services sector, Applied Digital's ROIC % distribution charts can be found below:

* The bar in red indicates where Applied Digital's ROIC % falls into.

Applied Digital ROIC % Calculation

Applied Digital's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in May. 2023 is calculated as:

where

Applied Digital's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Feb. 2024 is calculated as:

where

Note: The Operating Income data used here is four times the quarterly (Feb. 2024) 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.

Applied Digital  (NAS:APLD) 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, Applied Digital's WACC % is 28.37%. Applied Digital's ROIC % is -11.14% (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.

Applied Digital ROIC % Related Terms

Thank you for viewing the detailed overview of Applied Digital's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.

Applied Digital (Applied Digital) Business Description