ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Churchill China's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 13.70%.
As of today (2024-06-01), Churchill China's WACC % is 8.59%. Churchill China's ROIC % is 12.83% (calculated using TTM income statement data).
Churchill China 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.
Churchill China ROIC % Historical Data
The historical data trend for Churchill China'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 Churchill China's ROIC %
For the Furnishings, Fixtures & Appliances subindustry, Churchill China'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.
Churchill China's ROIC % Distribution in the Furnishings, Fixtures & Appliances Industry
For the Furnishings, Fixtures & Appliances industry and Consumer Cyclical sector, Churchill China's ROIC % distribution charts can be found below:
* The bar in red indicates where Churchill China's ROIC % falls into.
Churchill China ROIC % Calculation
Churchill China'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 two times the semi-annual (Dec. 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.
Churchill China (STU:EQW) 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, Churchill China's WACC % is 8.59%. Churchill China's ROIC % is 12.83% (calculated using TTM income statement data).
Churchill China 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.
Churchill China 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.
Churchill China ROIC % Related Terms
Thank you for viewing the detailed overview of Churchill China's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Churchill China PLC is a British pottery manufacturer. It is a manufacturer and distributor of tabletop products. Its customers include the pub, restaurant and hotel chains, sports and conference venues, health and education establishments and contract caterers. Its segments include Ceramics, the sale of ceramic tableware and complimentary items, and Materials, the sale of materials for the production of ceramics, to the tableware industry, majority of its revenue is generated from Ceramics segment. It operates in the UK, Rest of Europe, USA and Rest of the World.
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