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CreditAccess Grameen (BOM:541770) ROIC % : 6.78% (As of Mar. 2024)


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What is CreditAccess Grameen 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 %. CreditAccess Grameen's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was 6.78%.

As of today (2024-05-18), CreditAccess Grameen's WACC % is 4.80%. CreditAccess Grameen's ROIC % is 7.74% (calculated using TTM income statement data). CreditAccess Grameen 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.


CreditAccess Grameen ROIC % Historical Data

The historical data trend for CreditAccess Grameen'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.

* Premium members only.

CreditAccess Grameen ROIC % Chart

CreditAccess Grameen Annual Data
Trend Mar15 Mar16 Mar17 Mar18 Mar19 Mar20 Mar21 Mar22 Mar23 Mar24
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 5.53 5.52 5.10 5.46 6.96

CreditAccess Grameen Quarterly Data
Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24
ROIC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.48 7.19 7.13 7.74 6.78

Competitive Comparison of CreditAccess Grameen's ROIC %

For the Credit Services subindustry, CreditAccess Grameen'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.


CreditAccess Grameen's ROIC % Distribution in the Credit Services Industry

For the Credit Services industry and Financial Services sector, CreditAccess Grameen's ROIC % distribution charts can be found below:

* The bar in red indicates where CreditAccess Grameen's ROIC % falls into.



CreditAccess Grameen ROIC % Calculation

CreditAccess Grameen's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Mar. 2024 is calculated as:

ROIC % (A: Mar. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Mar. 2023 ) + Invested Capital (A: Mar. 2024 ))/ count )
=22108.3 * ( 1 - 25.44% )/( (200914 + 272759)/ 2 )
=16483.94848/236836.5
=6.96 %

where

Invested Capital(A: Mar. 2024 )
=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))
=288461.6 - 2563.5 - ( 13139.1 - max(0, 2563.5 - 264745.3+13139.1))
=272759

CreditAccess Grameen's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Mar. 2024 is calculated as:

ROIC % (Q: Mar. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Dec. 2023 ) + Invested Capital (Q: Mar. 2024 ))/ count )
=24639.6 * ( 1 - 25% )/( (0 + 272759)/ 1 )
=18479.7/272759
=6.78 %

where

Invested Capital(Q: Mar. 2024 )
=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))
=288461.6 - 2563.5 - ( 13139.1 - max(0, 2563.5 - 264745.3+13139.1))
=272759

Note: The Operating Income data used here is four times the quarterly (Mar. 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.


CreditAccess Grameen  (BOM:541770) 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, CreditAccess Grameen's WACC % is 4.80%. CreditAccess Grameen's ROIC % is 7.74% (calculated using TTM income statement data). CreditAccess Grameen 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. CreditAccess Grameen 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.


CreditAccess Grameen ROIC % Related Terms

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CreditAccess Grameen (BOM:541770) Business Description

Traded in Other Exchanges
Address
New No. 49 (Old No. 725), 46th Cross, 8th Block, Jayanagar, Next to Rajalakshmi Kalayana Mantap, Bengaluru, KA, IND, 560070
CreditAccess Grameen Ltd provides financial and non-financial products and services. The company is engaged in providing microfinance services to women who are enrolled as members and organized as Joint Liability Groups. The only operating segment of the company is lending to members. Geographically, it operates only in India. The company's financial product includes income generation loans, home improvement loans, emergency loans, family welfare loans, Gruha Vikas loans, Grameen Swarna loans, Grameen Vikas loans, life insurance, and others.

CreditAccess Grameen (BOM:541770) Headlines

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