ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Clearwire's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2013 was -18.51%.
As of today (2024-05-17), Clearwire's WACC % is 0.00%. Clearwire's ROIC % is 0.00% (calculated using TTM income statement data).
Clearwire earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Clearwire ROIC % Historical Data
The historical data trend for Clearwire'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.
For the Telecom Services subindustry, Clearwire'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.
Clearwire's ROIC % Distribution in the Telecommunication Services Industry
For the Telecommunication Services industry and Communication Services sector, Clearwire's ROIC % distribution charts can be found below:
* The bar in red indicates where Clearwire's ROIC % falls into.
Clearwire ROIC % Calculation
Clearwire's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2012 is calculated as:
Note:
The Operating Income data used here is four times the quarterly (Mar. 2013) 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.
Clearwire (FRA:CBV) 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, Clearwire's WACC % is 0.00%. Clearwire'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.
Clearwire ROIC % Related Terms
Thank you for viewing the detailed overview of Clearwire's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Clearwire Corp builds wireless networks intended primarily to provide Internet access to consumers and businesses. The firm was formed in 2008 via the merger of 'Old' Clearwire, a firm founded in 2003 to build wireless networks and certain assets from Sprint Nextel. These assets included wireless spectrum and network equipment that Sprint had intended for use in building wireless networks based on WiMAX, a fairly new wireless standard designed to offer data, rather than phone, services. At the time of Clearwire's creation, it received approx $3.2 billion investment from a group of investors that includes cable companies Comcast, Time Warner Cable, and Bright House Networks and technology firms Google and Intel. These funds will be used to finance network expansion. Sprint owns more than half of Clearwire via its interest in a subsidiary that holds all of Clearwire's assets. Intel is the firm's second largest shareholder, with a 13% stake. Clearwire's networks currently cover territories with a combined population of about 20 million people. Most of these networks were built by the original Clearwire using a pre-standards version of WiMAX technology. All current construction is entirely WiMAX based and Clearwire plans to upgrade older networks to WiMAX over the next two years. The firm owns wireless spectrum capable of covering most of the U.S. population and networks currently under construction will allow it to serve about 75 million people. Clearwire is in the initial stages of building networks covering an addition 45 million people. Wireless services are provided using a wireless modem or PC card, which customers can either buy or lease from the company. Clearwire's Internet access service offers download speeds of up to 2 megabits per second (Mbps) in markets with older technology and 4 Mbps in areas served with WiMAX. The firm markets its service directly to customers and will also resell services through Sprint and its cable investors. Clearwire competes with phone and cable companies for Internet access customers. It also competes with wireless carriers that offer data services over their existing networks. Both AT&T and Verizon Wireless, the two largest carriers in the U.S., have announced plans to deploy networks based on LTE, an alternative next-generation wireless standard that is still in development.
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