ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Personal Group Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 31.59%.
As of today (2024-05-10), Personal Group Holdings's WACC % is 9.43%. Personal Group Holdings's ROIC % is 22.94% (calculated using TTM income statement data).
Personal Group Holdings 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.
* 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 Personal Group Holdings's ROIC %
For the Insurance - Property & Casualty subindustry, Personal Group 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.
Personal Group Holdings's ROIC % Distribution in the Insurance Industry
For the Insurance industry and Financial Services sector, Personal Group Holdings's ROIC % distribution charts can be found below:
* The bar in red indicates where Personal Group Holdings's ROIC % falls into.
Personal Group Holdings ROIC % Calculation
Personal Group Holdings's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:
Note:
The EBIT 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.
Personal Group Holdings (LSE:PGH) 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, Personal Group Holdings's WACC % is 9.43%. Personal Group Holdings's ROIC % is 22.94% (calculated using TTM income statement data).
Personal Group Holdings 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.
Personal Group Holdings 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.
Personal Group Holdings ROIC % Related Terms
Thank you for viewing the detailed overview of Personal Group Holdings's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Personal Group Holdings (LSE:PGH) Business Description
Personal Group Holdings PLC is a UK-based insurance that provides benefits and services focused on improving employee health, well-being, and engagement. The group is principally engaged in providing short-term accident and health insurance and provide salary sacrifice technology products. It provides a range of employee benefits, from retail discounts to salary sacrifice schemes, including cycle to work, childcare vouchers, and home technology as well as a range of in-house insurance products such as hospital cash plan, death benefit, and convalescence cover. The company manages its business into four reportable segments namely Pay & Reward, Benefits Platform, Affordable Insurance, and Other owned benefits.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
Portfolio Contest
LSE:PGH has been successfully added to your 