United States Steel (BUE:X) ROIC % : -1.88% (As of Dec. 2023)

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What is United States Steel 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 %. United States Steel's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was -1.88%.

As of today (2024-05-04), United States Steel's WACC % is 11.22%. United States Steel's ROIC % is 5.48% (calculated using TTM income statement data). United States Steel earns returns that do not match up to its cost of capital. It will destroy value as it grows.

United States Steel ROIC % Historical Data

The historical data trend for United States Steel'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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United States Steel ROIC % Chart

United States Steel Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

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-0.77

-9.40

49.02

25.38

7.50

United States Steel Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROIC %	Get a 7-Day Free Trial															3.41	5.43	13.60	7.56	-1.88

Competitive Comparison of United States Steel's ROIC %

For the Steel subindustry, United States Steel'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.

United States Steel's ROIC % Distribution in the Steel Industry

For the Steel industry and Basic Materials sector, United States Steel's ROIC % distribution charts can be found below:

* The bar in red indicates where United States Steel's ROIC % falls into.

United States Steel ROIC % Calculation

United States Steel's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROIC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	306489 * ( 1 - 14.52% )	/	( (2029738.494	+	4960501.005)	/ 2 )
=	261986.7972	/	3495119.7495
=	7.50 %

where

	Invested Capital		(A: Dec. 2022 )
=	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	))
=	3262133.61	-	644949.532	-	( 587445.584	-	max(0, 663726.332	-	1318734.864	+	587445.584	))
=	2029738.494

	Invested Capital		(A: Dec. 2023 )
=	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	))
=	7382811.007	-	1358082.001	-	( 1064228.001	-	max(0, 1425228.001	-	2506423.002	+	1064228.001	))
=	4960501.005

United States Steel's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROIC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-187720 * ( 1 - 51.52% )	/	( (4729574.381	+	4960501.005)	/ 2 )
=	-91006.656	/	4845037.693
=	-1.88 %

where

	Invested Capital		(Q: Sep. 2023 )
=	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	))
=	7137230.447	-	1280117.135	-	( 1127538.931	-	max(0, 1330159.987	-	2587880.321	+	1127538.931	))
=	4729574.381

	Invested Capital		(Q: Dec. 2023 )
=	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	))
=	7382811.007	-	1358082.001	-	( 1064228.001	-	max(0, 1425228.001	-	2506423.002	+	1064228.001	))
=	4960501.005

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

United States Steel (BUE:X) 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, United States Steel's WACC % is 11.22%. United States Steel's ROIC % is 5.48% (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.

United States Steel ROIC % Related Terms

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United States Steel (BUE:X) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Steel » United States Steel Corp (BUE:X) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

X:USA X:Mexico 1USX1:Italy USX1:Germany X:Chile USSX34:Brazil

Address

600 Grant Street, Pittsburgh, PA, USA, 15219-2800

Website

https://www.ussteel.com

United States Steel Corp operates primarily in the United States but also has a steelmaking capacity in Slovakia. The company's operating segments include North American Flat-Rolled (Flat-Rolled), Mini Mill, U. S. Steel Europe (USSE), and Tubular Products (Tubular). The Flat-Rolled segment includes U. S. Steel's integrated steel plants and equity investees in North America involved in the production of slabs, strip mill plates, sheets, and tin mill products, as well as all iron ore and coke production facilities in the United States. It primarily serves North American customers in the service center, conversion, transportation, construction, container, and appliance, and electrical markets.