PetSmart (FRA:PEM) ROC (Joel Greenblatt) % : 47.94% (As of Oct. 2014)

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What is PetSmart ROC (Joel Greenblatt) %?

Joel Greenblatt defined Return on Capital differently in his book The Little Book That Still Beats the Market (Little Books. Big Profits). He defines ROC (Joel Greenblatt) % as EBIT divided by the total of Property, Plant and Equipment and net working capital. PetSmart's annualized ROC (Joel Greenblatt) % for the quarter that ended in Oct. 2014 was 47.94%.

The historical rank and industry rank for PetSmart's ROC (Joel Greenblatt) % or its related term are showing as below:

FRA:PEM's ROC (Joel Greenblatt) % is not ranked ^*
in the Retail - Cyclical industry.
Industry Median: 10.155
* Ranked among companies with meaningful ROC (Joel Greenblatt) % only.

PetSmart's 5-Year average Growth Rate of ROC (Joel Greenblatt) % was 0.00% per year.

PetSmart ROC (Joel Greenblatt) % Historical Data

The historical data trend for PetSmart's ROC (Joel Greenblatt) % 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.

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PetSmart ROC (Joel Greenblatt) % Chart

PetSmart Annual Data

Trend

Jan06

Jan07

Jan08

Jan09

Jan10

Jan11

Jan12

Jan13

Jan14

Jan15

ROC (Joel Greenblatt) %

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32.16

38.54

51.70

57.59

64.84

PetSmart Quarterly Data
	Apr10	Jul10	Oct10	Jan11	Apr11	Jul11	Oct11	Jan12	Apr12	Jul12	Oct12	Jan13	Apr13	Jul13	Oct13	Jan14	Apr14	Jul14	Oct14	Jan15
ROC (Joel Greenblatt) %	Get a 7-Day Free Trial															69.36	56.40	52.37	47.94	74.78

Competitive Comparison of PetSmart's ROC (Joel Greenblatt) %

For the Specialty Retail subindustry, PetSmart's ROC (Joel Greenblatt) %, along with its competitors' market caps and ROC (Joel Greenblatt) % 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.

PetSmart's ROC (Joel Greenblatt) % Distribution in the Retail - Cyclical Industry

For the Retail - Cyclical industry and Consumer Cyclical sector, PetSmart's ROC (Joel Greenblatt) % distribution charts can be found below:

* The bar in red indicates where PetSmart's ROC (Joel Greenblatt) % falls into.

PetSmart ROC (Joel Greenblatt) % Calculation

Joel Greenblatt defined Return on Capital differently in his book The Little Book That Still Beats the Market (Little Books. Big Profits) . He defines Return on Capital as follows:

ROC (Joel Greenblatt) %

EBIT

Average of (Net fixed Assets

Net Working Capital)

EBIT stands for Earnings Before Interest and Taxes.

Fixed Assets are also known as non-current assets. They include the Property, Plant and Equipment that the firm needs in its operation.

GuruFocus calculates net working capital as: (Accounts Receivable + Total Inventories + Other Current Assets) - (Accounts Payable & Accrued Expense + Deferred Revenue + Other Current Liabilities). We're trying to account for OPERATING assets and liabilities (part of daily business) when calculating working capital. Cash and marketable securities are considered NON-OPERATING assets and are not included in calculation. We will also back out all interest bearing debt, short term debt and the portion of long term debt that is due in the current period from the current liabilities. This debt will be considered when computing cost of capital and it would be inappropriate to count it twice.

	Working Capital		(Q: Jul. 2014 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(0	+	586.296	+	184.988)	-	(345.211	+	0	+	185.308)
=	240.765

	Working Capital		(Q: Oct. 2014 )
=	(Accounts Receivable	+	Total Inventories	+	Other Current Assets)	-	(Accounts Payable & Accrued Expense	+	Defer. Rev.	+	Other Current Liabilities)
=	(0	+	676.441	+	225.252)	-	(404.174	+	0	+	183.249)
=	314.27

When net working capital is negative, 0 is used.

So ROC (Joel Greenblatt) % of PetSmart for the quarter that ended in Oct. 2014 can be restated as:

	ROC (Joel Greenblatt) %		(Q: Oct. 2014 )
=	EBIT	/	Average of (Net fixed Assets	+	Net Working Capital)
=	EBIT	/	Average of (Property, Plant and Equipment	+	Net Working Capital)
			Q: Jul. 2014		Q: Oct. 2014
=	EBIT	/	( ( (Property, Plant and Equipment + Net Working Capital)	+	(Property, Plant and Equipment + Net Working Capital) )	/	count )
=	476.6	/	( ( (705.087 + max(240.765, 0))	+	(728.202 + max(314.27, 0)) )	/	2 )
=	476.6	/	( ( 945.852	+	1042.472 )	/	2 )
=	476.6	/	994.162
=	47.94 %

Note: The EBIT data used here is four times the quarterly (Oct. 2014) EBIT data.

PetSmart (FRA:PEM) ROC (Joel Greenblatt) % Explanation

The way Joel Greenblatt defines Return on Capital is a more accurate measure of how efficiently the company generates returns onthe capital actually invested in the business. EBIT is used instead of net income because the tax and interest payment may be affected by factors other than the core business operation. Intangible assets are not included in the calculation because they don't need to be replaced.

Joel Greenblatt uses his definition of Return on Capital and Earnings Yield (Joel Greenblatt) % to rank companies.

PetSmart ROC (Joel Greenblatt) % Related Terms

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PetSmart (FRA:PEM) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » PetSmart Inc (FRA:PEM) » Definitions » ROC (Joel Greenblatt) %

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PetSmart Inc was incorporated in the State of Delaware in 1986. The Company provides specialty products, services and solutions for the lifetime needs of pets in North America. It offers a broad selection of products for all the life stages of pets, as well as various pet services including professional grooming, training, day camp for dogs and boarding. It also offers pet products through its website, PetSmart.com. As of 2 February 2014, it operated 1,333 retail stores and had full-service veterinary hospitals in 844 of its stores. MMI Holdings, Inc., through a wholly owned subsidiary, Medical Management International, Inc., operated 837 of the veterinary hospitals under the registered trade name of "Banfield, The Pet Hospital." The remaining 7 hospitals are operated by other third parties in Canada. The Company opened 55 net new stores in 2013 and at the end of the year operated 1,333 retail stores in the United States, Puerto Rico and Canada. Its stores typically range in size from 12,000 to 27,500 square feet and carry a broad selection of high-quality pet products at everyday low prices. It offers approximately 11,000 distinct items in stores and 9,000 additional items on its website, PetSmart.com, including nationally recognized brand names, as well as an extensive selection of proprietary brands across a range of product categories. All the Company's stores feature pet styling salons that provide high-quality grooming services and offer comprehensive pet training services. Its PetsHotels provide boarding for dogs and cats, which includes 24-hour supervision by caregivers who are trained to provide personalized pet care, temperature controlled rooms and suites, daily specialty treats and play time, as well as day camp for dogs. As of 3 February 2014, it operated 199 PetsHotels. The Company's trademarks include PetSmart, PetSmart.com, PetSmart PetsHotel, PetPerks, and Where Pets Are Family, as well as many others.

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