McRae Industries (McRae Industries) ROIC % : 13.52% (As of Jul. 2023)

View and export this data going back to 2005. Start your Free Trial

What is McRae Industries 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 %. McRae Industries's annualized return on invested capital (ROIC %) for the quarter that ended in Jul. 2023 was 13.52%.

As of today (2024-05-13), McRae Industries's WACC % is 4.77%. McRae Industries's ROIC % is 13.52% (calculated using TTM income statement data). McRae Industries 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.

McRae Industries ROIC % Historical Data

The historical data trend for McRae Industries'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.

McRae Industries ROIC % Chart

McRae Industries Annual Data

Trend

Jul99

Jul00

Jul01

Jul02

Jul03

Jul04

Jul05

Jul21

Jul22

Jul23

ROIC %

Get a 7-Day Free Trial

7.74

4.45

10.07

17.58

13.52

McRae Industries Semi-Annual Data
	Jul89	Jul90	Jul91	Jul92	Jul93	Jul94	Jul95	Jul96	Jul97	Jul98	Jul99	Jul00	Jul01	Jul02	Jul03	Jul04	Jul05	Jul21	Jul22	Jul23
ROIC %	Get a 7-Day Free Trial															7.74	4.45	10.07	17.58	13.52

Competitive Comparison of McRae Industries's ROIC %

For the Footwear & Accessories subindustry, McRae Industries'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.

McRae Industries's ROIC % Distribution in the Manufacturing - Apparel & Accessories Industry

For the Manufacturing - Apparel & Accessories industry and Consumer Cyclical sector, McRae Industries's ROIC % distribution charts can be found below:

* The bar in red indicates where McRae Industries's ROIC % falls into.

McRae Industries ROIC % Calculation

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

	ROIC % (A: Jul. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jul. 2022 )	+	Invested Capital (A: Jul. 2023 ))	/ count )
=	10.266 * ( 1 - 27.09% )	/	( (58.543	+	52.219)	/ 2 )
=	7.4849406	/	55.381
=	13.52 %

where

	Invested Capital		(A: Jul. 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	))
=	91.044	-	6.64	-	( 25.861	-	max(0, 9.77	-	76.754	+	25.861	))
=	58.543

	Invested Capital		(A: Jul. 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	))
=	95.469	-	3.415	-	( 39.835	-	max(0, 6.505	-	82.316	+	39.835	))
=	52.219

McRae Industries's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jul. 2023 is calculated as:

	ROIC % (Q: Jul. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jul. 2022 )	+	Invested Capital (Q: Jul. 2023 ))	/ count )
=	10.266 * ( 1 - 27.09% )	/	( (58.543	+	52.219)	/ 2 )
=	7.4849406	/	55.381
=	13.52 %

where

	Invested Capital		(Q: Jul. 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	))
=	91.044	-	6.64	-	( 25.861	-	max(0, 9.77	-	76.754	+	25.861	))
=	58.543

	Invested Capital		(Q: Jul. 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	))
=	95.469	-	3.415	-	( 39.835	-	max(0, 6.505	-	82.316	+	39.835	))
=	52.219

Note: The Operating Income data used here is one times the annual (Jul. 2023) data.

McRae Industries (OTCPK:MCRAA) 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, McRae Industries's WACC % is 4.77%. McRae Industries's ROIC % is 13.52% (calculated using TTM income statement data). McRae Industries 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. McRae Industries 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.

McRae Industries ROIC % Related Terms

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

McRae Industries (McRae Industries) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Manufacturing - Apparel & Accessories » McRae Industries Inc (OTCPK:MCRAA) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

MCRAB:USA

Address

400 North Main Street, P.O. Box 1239, Mount Gilead, NC, USA, 27306

Website

http://www.mcraeindustries.com

McRae Industries Inc operates in the footwear industry. Its principal lines of business are manufacturing and selling military combat boots and importing and selling western and work boots. It operates through the Western and Lifestyle Segments. The Western and Lifestyle segment, which is the key revenue driver, includes western, ladies fashion, and children's footwear products under the Dan Post, Dingo, and Laredo Western Boots brand names.