ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. PT Alkindo Naratama Tbk's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was 7.27%.
As of today (2024-05-17), PT Alkindo Naratama Tbk's WACC % is 6.52%. PT Alkindo Naratama Tbk's ROIC % is 4.09% (calculated using TTM income statement data).
PT Alkindo Naratama Tbk earns returns that do not match up to its cost of capital. It will destroy value as it grows.
* 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 PT Alkindo Naratama Tbk's ROIC %
For the Paper & Paper Products subindustry, PT Alkindo Naratama Tbk'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.
PT Alkindo Naratama Tbk's ROIC % Distribution in the Forest Products Industry
For the Forest Products industry and Basic Materials sector, PT Alkindo Naratama Tbk's ROIC % distribution charts can be found below:
* The bar in red indicates where PT Alkindo Naratama Tbk's ROIC % falls into.
PT Alkindo Naratama Tbk ROIC % Calculation
PT Alkindo Naratama Tbk'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 (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.
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, PT Alkindo Naratama Tbk's WACC % is 6.52%. PT Alkindo Naratama Tbk's ROIC % is 4.09% (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.
PT Alkindo Naratama Tbk ROIC % Related Terms
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PT Alkindo Naratama Tbk (ISX:ALDO) Business Description
PT Alkindo Naratama Tbk is engaged in manufacturing converted paper products. The company has four business segments namely Paper converting, Chemical, Polymer, and Paper. The company produces various types of paper products namely paper core, paper tube, honeycomb products, edge protector and paper box. The paper core segment includes STD core, WG core, SPC core and prime core. Paper tube includes the POY, DTY and FDY paper tube which are custom specific and packaged as per client requirement. Honeycomb products include pallets and boxes, layer and pad, honeycomb core for furniture and textile board/spacer.
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