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LIVN (LivaNova) ROIC % : 5.43% (As of Sep. 2024)


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What is LivaNova 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 %. LivaNova's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was 5.43%.

As of today (2024-10-31), LivaNova's WACC % is 7.39%. LivaNova's ROIC % is 0.49% (calculated using TTM income statement data). LivaNova earns returns that do not match up to its cost of capital. It will destroy value as it grows.


LivaNova ROIC % Historical Data

The historical data trend for LivaNova'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.

* Premium members only.

LivaNova ROIC % Chart

LivaNova Annual Data
Trend Apr14 Apr15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 0.50 -3.46 -0.04 3.02 -0.24

LivaNova Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
ROIC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.36 -0.07 4.04 6.32 5.43

Competitive Comparison of LivaNova's ROIC %

For the Medical Devices subindustry, LivaNova'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.


LivaNova's ROIC % Distribution in the Medical Devices & Instruments Industry

For the Medical Devices & Instruments industry and Healthcare sector, LivaNova's ROIC % distribution charts can be found below:

* The bar in red indicates where LivaNova's ROIC % falls into.



LivaNova ROIC % Calculation

LivaNova'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 )
=21.476 * ( 1 - 121.73% )/( (1935.474 + 1979.007)/ 2 )
=-4.6667348/1957.2405
=-0.24 %

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))
=2294.773 - 145.127 - ( 214.172 - max(0, 297.398 - 886.136+214.172))
=1935.474

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))
=2429.563 - 184.052 - ( 266.504 - max(0, 334.983 - 988.158+266.504))
=1979.007

LivaNova's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2024 is calculated as:

ROIC % (Q: Sep. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jun. 2024 ) + Invested Capital (Q: Sep. 2024 ))/ count )
=142.4 * ( 1 - 25.9% )/( (1921.4 + 1966.7)/ 2 )
=105.5184/1944.05
=5.43 %

where

Note: The Operating Income data used here is four times the quarterly (Sep. 2024) 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.


LivaNova  (NAS:LIVN) 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, LivaNova's WACC % is 7.39%. LivaNova's ROIC % is 0.49% (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.


LivaNova ROIC % Related Terms

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LivaNova Business Description

Traded in Other Exchanges
Address
20 Eastbourne Terrace, London, GBR, W2 6LG
UK-based LivaNova was born of a combination between Cyberonics in the US and Sorin in Italy. The medical-device firm is primarily focused on cardiopulmonary solutions (with heart-lung machines and oxygenation equipment) as well as neuromodulation devices for treatment-resistant epilepsy and depression. Following the merger, LivaNova divested its cardiac rhythm management and heart valve businesses. It derives roughly half of its revenue from the US market, another 21% from Europe, and the remainder from the rest of the world.
Executives
Francesco Bianchi director C/O LIVANOVA PLC, 5 MERCHANT SQUARE, LONDON X0 W2 1AY
Daniel Jeffrey Moore director 100 CYBERONICS BVLD, HOUSTON TX 77058
James Christopher Barry director 7475 LUSK BLVD, SAN DIEGO CA 92121
Damien Mcdonald officer: COO 5 MERCHANT SQUARE, NORTH WHARF ROAD, LONDON X0 W21AY
Michael Damon Hutchinson officer: Chief Legal Officer 2825 AIRVIEW BLVD, KALAMAZOO MI 49002
Brooke Story director C/O SIGILON THERAPEUTICS, INC., 100 BINNEY STREET, SUITE 600, CAMBRIDGE MA 02142
Peter M Wilver director
Alfred J Novak director 325 NE 6TH ST, BOCA RATON FL 33432
William A Kozy director C/O BECTON DICKERSON & CO, 1 BECTON DR, FRANKLIN LAKES NJ 07417
Marco Dolci officer: SVP Global Operations, R&D VIA BENIGNO CRESPI 17, MILAN L6 20159
Todd C Schermerhorn director C/O C.R BARD INC, 730 CENTRAL AVE, MURRAY HILL NJ 07974
Alex Shvartsburg officer: Interim CFO 20 EASTBOURNE TERRACE, LONDON X0 W26LG
Roy Khoury officer: President, International 5 MERCHANT SQUARE, NORTH WHARF ROAD, LONDON X0 W21AY
Thad Allen Huston officer: Chief Financial Officer 941 BLOOMFIELD ST, HOBOKEN NJ 07030
Seng Stacy Enxing director C/O HILL-ROM HOLDINGS, INC., SUITE 4100 180 NORTH STETSON AVENUE, CHICAGO IL 60601