Heiwa Real Estate REIT (TSE:8966) ROIC % : 3.82% (As of Nov. 2023)

Heiwa Real Estate REIT ROIC % Chart

Heiwa Real Estate REIT Annual Data
	Trend	Nov14	Nov15	Nov16	Nov17	Nov18	Nov19	Nov20	Nov21	Nov22	Nov23
ROIC %		Get a 7-Day Free Trial					3.33	3.75	3.44	3.77	3.55

Heiwa Real Estate REIT Semi-Annual Data
	Nov13	Nov14	May15	Nov15	May16	Nov16	May17	Nov17	May18	Nov18	May19	Nov19	May20	Nov20	May21	Nov21	May22	Nov22	May23	Nov23
ROIC %	Get a 7-Day Free Trial															3.42	3.55	3.92	3.47	3.82

Competitive Comparison of Heiwa Real Estate REIT's ROIC %

For the REIT - Diversified subindustry, Heiwa Real Estate REIT'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.

Heiwa Real Estate REIT's ROIC % Distribution in the REITs Industry

For the REITs industry and Real Estate sector, Heiwa Real Estate REIT's ROIC % distribution charts can be found below:

* The bar in red indicates where Heiwa Real Estate REIT's ROIC % falls into.

Heiwa Real Estate REIT ROIC % Calculation

Heiwa Real Estate REIT's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Nov. 2023 is calculated as:

where

Heiwa Real Estate REIT's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Nov. 2023 is calculated as:

where

Note: The Operating Income data used here is two times the semi-annual (Nov. 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.

Heiwa Real Estate REIT  (TSE:8966) 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, Heiwa Real Estate REIT's WACC % is 1.70%. Heiwa Real Estate REIT's ROIC % is 3.62% (calculated using TTM income statement data). Heiwa Real Estate REIT 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. Heiwa Real Estate REIT 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.

Heiwa Real Estate REIT ROIC % Related Terms

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Heiwa Real Estate REIT (TSE:8966) Business Description