Aveo Healthcare (ASX:AEH) ROIC % : -0.81% (As of Dec. 2013)

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What is Aveo Healthcare ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Aveo Healthcare's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2013 was -0.81%.

As of today (2024-05-26), Aveo Healthcare's WACC % is 0.00%. Aveo Healthcare's ROIC % is 0.00% (calculated using TTM income statement data). Aveo Healthcare earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Aveo Healthcare ROIC % Historical Data

The historical data trend for Aveo Healthcare'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.

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Aveo Healthcare ROIC % Chart

Aveo Healthcare Annual Data

Trend

Jun04

Jun05

Jun06

Jun07

Jun08

Jun09

Jun10

Jun11

Jun12

Jun13

ROIC %

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0.09

0.46

1.27

-4.80

-0.28

Aveo Healthcare Semi-Annual Data
	Jun04	Dec04	Jun05	Dec05	Jun06	Dec06	Jun07	Dec07	Jun08	Dec08	Jun09	Dec09	Jun10	Dec10	Jun11	Dec11	Jun12	Dec12	Jun13	Dec13
ROIC %	Get a 7-Day Free Trial															0.42	-9.90	-0.87	0.25	-0.81

Competitive Comparison of Aveo Healthcare's ROIC %

For the Real Estate Services subindustry, Aveo Healthcare'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.

Aveo Healthcare's ROIC % Distribution in the Real Estate Industry

For the Real Estate industry and Real Estate sector, Aveo Healthcare's ROIC % distribution charts can be found below:

* The bar in red indicates where Aveo Healthcare's ROIC % falls into.

Aveo Healthcare ROIC % Calculation

Aveo Healthcare's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jun. 2013 is calculated as:

	ROIC % (A: Jun. 2013 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2012 )	+	Invested Capital (A: Jun. 2013 ))	/ count )
=	-3.516 * ( 1 - 27.55% )	/	( (897.07	+	896.762)	/ 2 )
=	-2.547342	/	896.916
=	-0.28 %

where

	Invested Capital		(A: Jun. 2012 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	627.848	-	4.625	-	( 3.02	-	max(0, 292.121	-	18.274	+	3.02	))
=	897.07

	Invested Capital		(A: Jun. 2013 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	616.036	-	3.818	-	( 3.697	-	max(0, 298.672	-	14.128	+	3.697	))
=	896.762

Aveo Healthcare's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2013 is calculated as:

	ROIC % (Q: Dec. 2013 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2013 )	+	Invested Capital (Q: Dec. 2013 ))	/ count )
=	-9.606 * ( 1 - 24.92% )	/	( (896.762	+	888.662)	/ 2 )
=	-7.2121848	/	892.712
=	-0.81 %

where

	Invested Capital		(Q: Jun. 2013 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	616.036	-	3.818	-	( 3.697	-	max(0, 298.672	-	14.128	+	3.697	))
=	896.762

	Invested Capital		(Q: Dec. 2013 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	607.126	-	4.122	-	( 4.142	-	max(0, 298.664	-	13.006	+	4.142	))
=	888.662

Note: The Operating Income data used here is two times the semi-annual (Dec. 2013) data.

Aveo Healthcare (ASX:AEH) 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, Aveo Healthcare's WACC % is 0.00%. Aveo Healthcare's ROIC % is 0.00% (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.

Aveo Healthcare ROIC % Related Terms

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Aveo Healthcare (ASX:AEH) Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

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Address

Website

http://aveohealthcare.com.au

Aveo Healthcare Ltd provides retirement communities in South-East Queensland. The Company's healthcare's portfolio comprises five retirement villages, located in Albany Creet, Clayfield, Cleveland, Durack and Taringa.