ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. LookSmart's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2015 was -86.90%.
As of today (2024-05-21), LookSmart's WACC % is 0.00%. LookSmart's ROIC % is -210.77% (calculated using TTM income statement data).
LookSmart earns returns that do not match up to its cost of capital. It will destroy value as it grows.
LookSmart ROIC % Historical Data
The historical data trend for LookSmart'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 Internet Content & Information subindustry, LookSmart'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.
LookSmart's ROIC % Distribution in the Interactive Media Industry
For the Interactive Media industry and Communication Services sector, LookSmart's ROIC % distribution charts can be found below:
* The bar in red indicates where LookSmart's ROIC % falls into.
LookSmart ROIC % Calculation
LookSmart's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2014 is calculated as:
Note:
The Operating Income data used here is four times the quarterly (Jun. 2015) 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.
LookSmart (FRA:LOKB) 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, LookSmart's WACC % is 0.00%. LookSmart's ROIC % is -210.77% (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.
LookSmart ROIC % Related Terms
Thank you for viewing the detailed overview of LookSmart's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
LookSmart Ltd was organized in 1996 and is incorporated in the State of Delaware. The Company is a search advertising network solutions Company that provides relevant solutions for search advertising customers. It operates in a large online search advertising ecosystem serving ads that target user queries on partner sites. It operates in the middle of this ecosystem, acquiring search queries from a variety of sources and matching them with the keywords of its search advertising customers. The Companys largest category of customers has been intermediaries, the majority of which purchase clicks to sell into the affiliate networks of the large search engine providers. Another category of customers are direct advertisers and their agencies whose objective is to obtain conversions or sales from the clicks. The last category of customers is self-service advertisers that sign-up online and pays by credit card. It offers search advertising customers targeted, pay-per-click (PPC) search via a monitored search advertising distribution network using the Companys AdCenter platform technology. The Companys search advertising network includes publishers and search advertising customers, including intermediaries and direct advertising customers and their agencies as well as self-service customers in the United States and certain other countries. The Companys application programming interface (API) allows search advertising customers and their advertising agencies to connect any type of marketing or reporting software with minimal effort for easier access, management, and optimization of search advertising campaigns. It also offers publishers licensed private-label search advertiser network solutions based on its AdCenter platform technology (Publisher Solutions). Publisher Solutions consist of hosted auction-based ad serving with an ad backfill capability that allows publishers and portals to manage their advertiser relationships, distribution channels and accounts. The Companys trademarks include LookSmart. It is subject to a number of domestic state and federal laws that affect companies conducting business on the Internet.
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