ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. TCL Electronics Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 6.83%.
As of today (2024-05-24), TCL Electronics Holdings's WACC % is 10.44%. TCL Electronics Holdings's ROIC % is 2.98% (calculated using TTM income statement data).
TCL Electronics Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.
* 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.
Competitive Comparison of TCL Electronics Holdings's ROIC %
For the Consumer Electronics subindustry, TCL Electronics Holdings'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.
TCL Electronics Holdings's ROIC % Distribution in the Hardware Industry
For the Hardware industry and Technology sector, TCL Electronics Holdings's ROIC % distribution charts can be found below:
* The bar in red indicates where TCL Electronics Holdings's ROIC % falls into.
TCL Electronics Holdings ROIC % Calculation
TCL Electronics Holdings's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:
Note:
The Operating Income data used here is two times the semi-annual (Dec. 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, TCL Electronics Holdings's WACC % is 10.44%. TCL Electronics Holdings's ROIC % is 2.98% (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.
TCL Electronics Holdings ROIC % Related Terms
Thank you for viewing the detailed overview of TCL Electronics Holdings's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
TCL Electronics Holdings (HKSE:01070) Business Description
TCL Electronics Holdings Ltd designs, manufactures, and sells televisions globally. Listed on the HKSE, TCL is headquartered in Shenzhen. By brand it is the third-largest supplier of televisions globally, but is second-largest in total television volume including televisions produced under original design and manufacture contracts for other brands. In 2020 TCL sold its wholesale TV business and purchased the TCL Communications business which focuses on smartphones and tablets. The five reportable operating segments are Smart screen segment, Internet business segment, Smart mobile, connective devices and services segment, All-category marketing segment and Smart commercial display, smart home, photovoltaic and other businesses segment.
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