ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Lam Soon (Thailand) PCL Shs's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 10.99%.
As of today (2024-05-15), Lam Soon (Thailand) PCL Shs's WACC % is 7.32%. Lam Soon (Thailand) PCL Shs's ROIC % is 9.41% (calculated using TTM income statement data).
Lam Soon (Thailand) PCL Shs 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.
Lam Soon (Thailand) PCL Shs ROIC % Historical 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.
Competitive Comparison of Lam Soon (Thailand) PCL Shs's ROIC %
For the Farm Products subindustry, Lam Soon (Thailand) PCL Shs'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.
Lam Soon (Thailand) PCL Shs's ROIC % Distribution in the Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, Lam Soon (Thailand) PCL Shs's ROIC % distribution charts can be found below:
* The bar in red indicates where Lam Soon (Thailand) PCL Shs's ROIC % falls into.
Lam Soon (Thailand) PCL Shs ROIC % Calculation
Lam Soon (Thailand) PCL Shs's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 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.
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, Lam Soon (Thailand) PCL Shs's WACC % is 7.32%. Lam Soon (Thailand) PCL Shs's ROIC % is 9.41% (calculated using TTM income statement data).
Lam Soon (Thailand) PCL Shs 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.
Lam Soon (Thailand) PCL Shs 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.
Lam Soon (Thailand) PCL Shs ROIC % Related Terms
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Lam Soon (Thailand) PCL Shs (BKK:LST) Business Description
Lam Soon (Thailand) PCL Shs along with its subsidiaries is principally engaged in the manufacture and distribution of palm oil. The group and its subsidiaries are organized into business units based on their products and services and have two reportable segments namely manufacturing and distribution of palm oil segment, which includes the generation of electricity from biogases, the by-products from palm oil manufacturing; and the manufacturing and distribution of processed fruits and vegetable segment. Geographically, operates through the region of Thailand and it holds a presence in the international market, however domestic sales account for the majority of revenue.
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