ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. AUPU Home Style's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was 19.69%.
As of today (2024-06-04), AUPU Home Style's WACC % is 13.42%. AUPU Home Style's ROIC % is 32.72% (calculated using TTM income statement data).
AUPU Home Style 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.
AUPU Home Style ROIC % Historical Data
The historical data trend for AUPU Home Style'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.
Competitive Comparison of AUPU Home Style's ROIC %
For the Furnishings, Fixtures & Appliances subindustry, AUPU Home Style'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.
AUPU Home Style's ROIC % Distribution in the Furnishings, Fixtures & Appliances Industry
For the Furnishings, Fixtures & Appliances industry and Consumer Cyclical sector, AUPU Home Style's ROIC % distribution charts can be found below:
* The bar in red indicates where AUPU Home Style's ROIC % falls into.
AUPU Home Style ROIC % Calculation
AUPU Home Style'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.
AUPU Home Style (SHSE:603551) 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, AUPU Home Style's WACC % is 13.42%. AUPU Home Style's ROIC % is 32.72% (calculated using TTM income statement data).
AUPU Home Style 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.
AUPU Home Style 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.
AUPU Home Style ROIC % Related Terms
Thank you for viewing the detailed overview of AUPU Home Style's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
AUPU Home Style (SHSE:603551) Business Description
AUPU Home Style Corp Ltd is engaged in manufacturing of integrated ceiling and other household products. The company manufactures and sells household bathroom appliances, ventilation replacement equipment, heating and cooling equipment, integrated ceilings, household electrical appliances, home decoration materials, metal products, metal materials, home kitchen appliances, integrated stoves, kitchenware products, sinks, cabinets, wood plastic products, home decoration materials, lighting appliances, smart home products, electronic products and accessories, electrical switches, sanitary ware, furniture, and provides installation, after-sales maintenance services.
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