Easy Software AG (HAM:ESY) ROIC % : 0.00% (As of Dec. 2022)

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What is Easy Software AG 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 %. Easy Software AG's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2022 was 0.00%.

As of today (2024-06-07), Easy Software AG's WACC % is 4.66%. Easy Software AG's ROIC % is 9.75% (calculated using TTM income statement data). Easy Software AG 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.

Easy Software AG ROIC % Historical Data

The historical data trend for Easy Software AG'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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Easy Software AG ROIC % Chart

Easy Software AG Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

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-6.18

37.10

-40.75

-0.24

9.75

Easy Software AG Semi-Annual Data
	Jun13	Dec13	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Dec22	Dec23
ROIC %	Get a 7-Day Free Trial															45.92	-8.00	-64.33	-	-

Competitive Comparison of Easy Software AG's ROIC %

For the Software - Application subindustry, Easy Software AG'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.

Easy Software AG's ROIC % Distribution in the Software Industry

For the Software industry and Technology sector, Easy Software AG's ROIC % distribution charts can be found below:

* The bar in red indicates where Easy Software AG's ROIC % falls into.

Easy Software AG ROIC % Calculation

Easy Software AG'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 )
=	3.244 * ( 1 - -4.51% )	/	( (28.462	+	41.102)	/ 2 )
=	3.3903044	/	34.782
=	9.75 %

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	))
=	36.991	-	13.941	-	( 3.526	-	max(0, 15.642	-	10.23	+	3.526	))
=	28.462

	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	))
=	49.499	-	29.012	-	( 2.263	-	max(0, 30.564	-	9.949	+	2.263	))
=	41.102

Easy Software AG's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2022 is calculated as:

	ROIC % (Q: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2021 )	+	Invested Capital (Q: Dec. 2022 ))	/ count )
=	0 * ( 1 - 0% )	/	( (26.215	+	28.462)	/ 2 )
=	0	/	27.3385
=	0.00 %

where

	Invested Capital		(Q: Dec. 2021 )
=	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	))
=	35.713	-	5.424	-	( 4.074	-	max(0, 7.108	-	19.612	+	4.074	))
=	26.215

	Invested Capital		(Q: 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	))
=	36.991	-	13.941	-	( 3.526	-	max(0, 15.642	-	10.23	+	3.526	))
=	28.462

Note: The Operating Income data used here is two times the semi-annual (Dec. 2022) data.

Easy Software AG (HAM:ESY) 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, Easy Software AG's WACC % is 4.66%. Easy Software AG's ROIC % is 9.75% (calculated using TTM income statement data). Easy Software AG 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. Easy Software AG 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.

Easy Software AG ROIC % Related Terms

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Easy Software AG (HAM:ESY) Business Description

Industry

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Comparable Companies

Traded in Other Exchanges

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Address

Easy Software AG, Am Hauptbahnhof 4, Mulheim An Der Ruhr, DEU, 45468

Website

http://www.easy.de

Easy Software AG is a developer and provider of software solutions for electronic document management and enterprise content management. It provides solutions for revision-proof document and data archiving for all relevant documents and records.

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