GURUFOCUS.COM » STOCK LIST » Industrials » Construction » Raoom Trading Co (SAU:9529) » Definitions » ROIC %

Raoom Trading Co (SAU:9529) ROIC % : 21.47% (As of Sep. 2023)


View and export this data going back to 2022. Start your Free Trial

What is Raoom Trading Co 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 %. Raoom Trading Co's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2023 was 21.47%.

As of today (2024-06-08), Raoom Trading Co's WACC % is 10.61%. Raoom Trading Co's ROIC % is 19.24% (calculated using TTM income statement data). Raoom Trading Co 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.


Raoom Trading Co ROIC % Historical Data

The historical data trend for Raoom Trading Co'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.

Raoom Trading Co ROIC % Chart

Raoom Trading Co Annual Data
Trend Dec21 Dec22
ROIC %
27.98 35.06

Raoom Trading Co Quarterly Data
Jun21 Dec21 Jun22 Sep22 Dec22 Jun23 Sep23
ROIC % Get a 7-Day Free Trial 23.34 20.51 68.42 - 21.47

Competitive Comparison of Raoom Trading Co's ROIC %

For the Building Products & Equipment subindustry, Raoom Trading Co'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.


Raoom Trading Co's ROIC % Distribution in the Construction Industry

For the Construction industry and Industrials sector, Raoom Trading Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Raoom Trading Co's ROIC % falls into.



Raoom Trading Co ROIC % Calculation

Raoom Trading Co's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2022 is calculated as:

ROIC % (A: Dec. 2022 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2021 ) + Invested Capital (A: Dec. 2022 ))/ count )
=43.708 * ( 1 - 5% )/( (127.567 + 109.317)/ 2 )
=41.5226/118.442
=35.06 %

where

Raoom Trading Co's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2023 is calculated as:

ROIC % (Q: Sep. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jun. 2023 ) + Invested Capital (Q: Sep. 2023 ))/ count )
=35.436 * ( 1 - 5.39% )/( (155.461 + 156.802)/ 2 )
=33.5259996/156.1315
=21.47 %

where

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


Raoom Trading Co  (SAU:9529) 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, Raoom Trading Co's WACC % is 10.61%. Raoom Trading Co's ROIC % is 19.24% (calculated using TTM income statement data). Raoom Trading Co 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. Raoom Trading Co 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.


Raoom Trading Co ROIC % Related Terms

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


Raoom Trading Co (SAU:9529) Business Description

Traded in Other Exchanges
N/A
Address
Onaiza Street, P.O. Box 48, Buraidah, SAU, 3245039
Raoom Trading Co is engaged in the manufacturing and trading of glass, mirrors, and aluminum decorations. Its products include Mirrors, Polycarbonate, Clear Flat Glass, Stained Glass, Reflective Glass, Trajectory Glass and Grained Glass.

Raoom Trading Co (SAU:9529) Headlines

No Headlines