ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Hil Industries Bhd's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 8.42%.
As of today (2024-05-23), Hil Industries Bhd's WACC % is 5.20%. Hil Industries Bhd's ROIC % is 10.39% (calculated using TTM income statement data).
Hil Industries 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.
Hil Industries Bhd ROIC % Historical Data
The historical data trend for Hil Industries Bhd'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 Hil Industries Bhd's ROIC %
For the Metal Fabrication subindustry, Hil Industries 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.
Hil Industries Bhd's ROIC % Distribution in the Industrial Products Industry
For the Industrial Products industry and Industrials sector, Hil Industries Bhd's ROIC % distribution charts can be found below:
* The bar in red indicates where Hil Industries Bhd's ROIC % falls into.
Hil Industries Bhd ROIC % Calculation
Hil Industries Bhd'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 (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.
Hil Industries Bhd (XKLS:8443) 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, Hil Industries Bhd's WACC % is 5.20%. Hil Industries Bhd's ROIC % is 10.39% (calculated using TTM income statement data).
Hil Industries 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.
Hil Industries 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.
Hil Industries Bhd ROIC % Related Terms
Thank you for viewing the detailed overview of Hil Industries Bhd's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Hil Industries Bhd (XKLS:8443) Business Description
Hil Industries Bhd is a manufacturer and seller of industrial and domestic moulded plastic products. The company's reportable segment include: Manufacturing; Property development and management; and Trading, services and others. The Manufacturing segment engages in the manufacture and sale of industrial and domestic moulded plastic products. The Property development and management segment is involved in the development of residential, commercial and light industrial properties, and letting out of properties and provision of property management services. Trading, services and others segment includes general trading. The company generates key revenue from the Manufacturing segment. It has a business presence in Malaysia, the PRC and Taiwan.
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