ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Sapura Industrial Bhd's annualized return on invested capital (ROIC %) for the quarter that ended in Oct. 2023 was 4.18%.
As of today (2024-05-29), Sapura Industrial Bhd's WACC % is 3.95%. Sapura Industrial Bhd's ROIC % is 4.53% (calculated using TTM income statement data).
Sapura Industrial Bhd 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.
* 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 Sapura Industrial Bhd's ROIC %
For the Auto Parts subindustry, Sapura Industrial Bhd'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.
Sapura Industrial Bhd's ROIC % Distribution in the Vehicles & Parts Industry
For the Vehicles & Parts industry and Consumer Cyclical sector, Sapura Industrial Bhd's ROIC % distribution charts can be found below:
* The bar in red indicates where Sapura Industrial Bhd's ROIC % falls into.
Sapura Industrial Bhd ROIC % Calculation
Sapura Industrial Bhd's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jan. 2023 is calculated as:
Note:
The Operating Income data used here is four times the quarterly (Oct. 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.
Sapura Industrial Bhd (XKLS:7811) 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, Sapura Industrial Bhd's WACC % is 3.95%. Sapura Industrial Bhd's ROIC % is 4.53% (calculated using TTM income statement data).
Sapura Industrial Bhd 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.
Sapura Industrial Bhd 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.
Sapura Industrial Bhd ROIC % Related Terms
Thank you for viewing the detailed overview of Sapura Industrial Bhd's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Sapura Industrial Bhd (XKLS:7811) Business Description
Sapura Industrial Bhd is an automotive components manufacturer. The company is organized into three business segments namely Manufacturing engaged in the manufacture and supply of products for the automotive, electronics, and electrical industries, and the manufacture of butt-weld fittings for oil and gas industries; Investment holding engaged in the holding of investments and provision of management services to subsidiaries; and Others engaged in trading of auto parts in the retail and after-sales market, providing computer-aided design and manufacture of sub-systems and systems for applications in production and testing and other dormant companies. The company earns the majority of its revenue from the Manufacturing segment. The company's operations are carried out solely in Malaysia.
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