ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Ceres Global Ag's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was 1.47%.
As of today (2024-06-07), Ceres Global Ag's WACC % is 8.91%. Ceres Global Ag's ROIC % is 5.59% (calculated using TTM income statement data).
Ceres Global Ag earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Ceres Global Ag ROIC % Historical Data
The historical data trend for Ceres Global Ag'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 Ceres Global Ag's ROIC %
For the Food Distribution subindustry, Ceres Global Ag'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.
Ceres Global Ag's ROIC % Distribution in the Retail - Defensive Industry
For the Retail - Defensive industry and Consumer Defensive sector, Ceres Global Ag's ROIC % distribution charts can be found below:
* The bar in red indicates where Ceres Global Ag's ROIC % falls into.
Ceres Global Ag ROIC % Calculation
Ceres Global Ag's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jun. 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.
Ceres Global Ag (TSX:CRP) 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, Ceres Global Ag's WACC % is 8.91%. Ceres Global Ag's ROIC % is 5.59% (calculated using TTM income statement data).
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.
Ceres Global Ag ROIC % Related Terms
Thank you for viewing the detailed overview of Ceres Global Ag's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Ceres Global Ag Corp is engaged in the agricultural, energy, and industrial supply chains through sourcing, storing, transporting, and marketing of commodity-based products and raw materials. It has three operating segments. The Grain segment, which is the key revenue driver, is engaged in grain procurement and merchandising of specialty grains and oilseeds such as oats, barley, rye, hard red spring wheat, durum wheat, canola, and pulses. The Supply Chain Services segment utilizes the corporation's facilities to provide logistics services, storage, and transloading for commodities and industrial products. The Seed and Processing segment is engaged in soybean crush, specialty crops blending, birdfeed production, and seed distribution in Western Canada.
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