ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. Covance's annualizedNet Income for the quarter that ended in Sep. 2014 was €205 Mil.
Covance's average Total Assets over the quarter that ended in Sep. 2014 was €1,917 Mil. Therefore, Covance's annualized ROA % for the quarter that ended in Sep. 2014 was 10.69%.
The historical rank and industry rank for Covance's ROA % or its related term are showing as below:
FRA:CVD's ROA % is not ranked *
in the Medical Diagnostics & Research industry.
Industry Median: -6.04 * Ranked among companies with meaningful ROA % only.
Covance ROA % Historical Data
The historical data trend for Covance's ROA % 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.
For the Diagnostics & Research subindustry, Covance's ROA %, along with its competitors' market caps and ROA % 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.
Covance's ROA % Distribution in the Medical Diagnostics & Research Industry
For the Medical Diagnostics & Research industry and Healthcare sector, Covance's ROA % distribution charts can be found below:
* The bar in red indicates where Covance's ROA % falls into.
Covance ROA % Calculation
Covance's annualized ROA % for the fiscal year that ended in Dec. 2013 is calculated as:
* 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.
In the calculation of annual ROA %, the net income of the last fiscal year and the average total assets over the fiscal year are used. In calculating the quarterly data,
the Net Income data used here is four times the quarterly (Sep. 2014) net income data.
ROA % is displayed in the 30-year financial page.
Covance (FRA:CVD) ROA % Explanation
ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A banks ROA % is typically well under 2%.
Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:
Note:
The Net Income data used here is four times the quarterly (Sep. 2014) net income data. The Revenue data used here is four times the quarterly (Sep. 2014) revenue 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.
Be Aware
Like ROE, ROA % is calculated with only 12 months 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. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).
Many analysts argue the higher return the better. Buffett states that really high ROA % may indicate vulnerability in the durability of the competitive advantage.
E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.
Covance ROA % Related Terms
Thank you for viewing the detailed overview of Covance's ROA % provided by GuruFocus.com. Please click on the following links to see related term pages.
Covance, Inc is a Delaware Corporation, founded in 1987. The Company is a drug development services company providing early-stage and late-stage product development services mainly to the pharmaceutical, biotechnology and medical device industries. It also provides laboratory testing services to the chemical, agrochemical and food industries. Its two reportable segments are early development services, which include discovery support services, preclinical services and clinical pharmacology services; and late-stage development services, which include central laboratory, Phase II-IV clinical development, and market access services. The Company's preclinical services include toxicology services, pharmaceutical chemistry and related services. The Company's preclinical area has been a source of innovation by introducing new technologies for client access to data such as StudyTracker, electronic animal identification, multimedia study reports and animal and test tube measures of induced cell proliferation or reproduction. The Company's preclinical toxicology services include in vivo toxicology studies, which are studies of the effects of drugs in animals, genetic toxicology studies, which include studies of the effects of drugs on chromosomes, as well as on genetically modified mice and other specialized toxicology services. In its pharmaceutical chemistry services, it determines the metabolic profile and bioavailability of drug candidates. It also provides laboratory testing services to the chemical, agricultural chemical and food industries. The Company offers services to agricultural chemical manufacturers to determine the potential risk to humans, animals and the environment from plant protection products such as pesticides. In its nutritional chemistry services, the Company offers a range of services to the food, nutriceutical and animal feed industries, including nutritional analysis and equivalency, nutritional content fact labels, microbiological and chemical contaminant safety analysis, pesticide screening and stability testing. It provides custom polyclonal and monoclonal antibody services for research purposes and purpose-bred animals for biomedical research. The Company provides optimization and translational services including custom immunology and monoclonal antibody services, metabolism studies and pharmacokinetic screening as well as non-GLP toxicology, in vivo pharmacology, imaging services and biomarker services. The Company's bioanalytical testing services helps determine the appropriate dose and frequency of drug application from late discovery evaluation through Phase III clinical testing on a full-scale, globally integrated basis. The Company provides clinical pharmacology services, including first-in-human trials, of new pharmaceuticals at its seven clinics located throughout the United States and its one clinic in Leeds, United Kingdom. The Company offers reimbursement and healthcare economics consulting services
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