ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Ratnaveer Precision Engineering's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2023 was 11.05%.
As of today (2024-05-26), Ratnaveer Precision Engineering's WACC % is 10.92%. Ratnaveer Precision Engineering's ROIC % is 11.05% (calculated using TTM income statement data).
Ratnaveer Precision Engineering 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.
Ratnaveer Precision Engineering ROIC % Historical 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.
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Ratnaveer Precision Engineering ROIC % Chart
Ratnaveer Precision Engineering Annual Data
Trend
Mar20
Mar21
Mar22
Mar23
ROIC %
7.57
4.62
6.83
11.05
Ratnaveer Precision Engineering Semi-Annual Data
Mar20
Mar21
Mar22
Mar23
ROIC %
7.57
4.62
6.83
11.05
Competitive Comparison of Ratnaveer Precision Engineering's ROIC %
For the Steel subindustry, Ratnaveer Precision Engineering'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.
Ratnaveer Precision Engineering's ROIC % Distribution in the Steel Industry
For the Steel industry and Basic Materials sector, Ratnaveer Precision Engineering's ROIC % distribution charts can be found below:
* The bar in red indicates where Ratnaveer Precision Engineering's ROIC % falls into.
Note:
The Operating Income data used here is one times the annual (Mar. 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.
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, Ratnaveer Precision Engineering's WACC % is 10.92%. Ratnaveer Precision Engineering's ROIC % is 11.05% (calculated using TTM income statement data).
Ratnaveer Precision Engineering 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.
Ratnaveer Precision Engineering 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.
Ratnaveer Precision Engineering ROIC % Related Terms
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Ratnaveer Precision Engineering (BOM:543978) Business Description
Ratnaveer Precision Engineering Ltd is a stainless steel (SS) product manufacturer focused on producing finished sheets, washers, solar roofing hooks, pipes and tubes. It manufactures finishing sheets, washers and solar mounting hooks at Unit I and SS pipes & tubes at Unit II. Unit III and Unit IV are dedicated to the backward integration process where Unit III is the melting unit where the company melts steel scrap and turns it into steel ingots and Unit IV is the rolling unit where flat ingots are further processed to turn them into sheets which are the raw material for washers.
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