Spirit Pub Co (LSE:SPRT) ROIC % : 7.71% (As of Feb. 2015)

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What is Spirit Pub Co 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 %. Spirit Pub Co's annualized return on invested capital (ROIC %) for the quarter that ended in Feb. 2015 was 7.71%.

As of today (2024-05-13), Spirit Pub Co's WACC % is 0.00%. Spirit Pub Co's ROIC % is 15.38% (calculated using TTM income statement data). Spirit Pub Co 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.

Spirit Pub Co ROIC % Historical Data

The historical data trend for Spirit Pub Co'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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Spirit Pub Co ROIC % Chart

Spirit Pub Co Annual Data

Trend

Aug08

Aug09

Aug10

Aug11

Aug12

Aug13

Aug14

ROIC %

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1.79

0.06

-24.42

2.45

9.60

Spirit Pub Co Semi-Annual Data
	Aug08	Aug09	Aug10	Feb11	Aug11	Feb12	Aug12	Feb13	Aug13	Feb14	Aug14	Feb15
ROIC %	Get a 7-Day Free Trial							4.05	2.04	10.15	15.40	7.71

Competitive Comparison of Spirit Pub Co's ROIC %

For the Leisure subindustry, Spirit Pub Co'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.

Spirit Pub Co's ROIC % Distribution in the Travel & Leisure Industry

For the Travel & Leisure industry and Consumer Cyclical sector, Spirit Pub Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Spirit Pub Co's ROIC % falls into.

Spirit Pub Co ROIC % Calculation

Spirit Pub Co's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Aug. 2014 is calculated as:

	ROIC % (A: Aug. 2014 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Aug. 2013 )	+	Invested Capital (A: Aug. 2014 ))	/ count )
=	194.5 * ( 1 - 9.8% )	/	( (1757.2	+	1896.9)	/ 2 )
=	175.439	/	1827.05
=	9.60 %

where

	Invested Capital		(A: Aug. 2013 )
=	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	))
=	1777.3	-	69.7	-	( 101.6	-	max(0, 188.3	-	138.7	+	101.6	))
=	1757.2

	Invested Capital		(A: Aug. 2014 )
=	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	))
=	1957.8	-	78	-	( 159.1	-	max(0, 222.7	-	205.6	+	159.1	))
=	1896.9

Spirit Pub Co's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Feb. 2015 is calculated as:

	ROIC % (Q: Feb. 2015 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Aug. 2014 )	+	Invested Capital (Q: Feb. 2015 ))	/ count )
=	125.4 * ( 1 - -14.71% )	/	( (1896.9	+	1836.2)	/ 2 )
=	143.84634	/	1866.55
=	7.71 %

where

	Invested Capital		(Q: Aug. 2014 )
=	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	))
=	1957.8	-	78	-	( 159.1	-	max(0, 222.7	-	205.6	+	159.1	))
=	1896.9

	Invested Capital		(Q: Feb. 2015 )
=	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	))
=	1948.3	-	132.3	-	( 144.1	-	max(0, 200.1	-	179.9	+	144.1	))
=	1836.2

Note: The Operating Income data used here is two times the semi-annual (Feb. 2015) data.

Spirit Pub Co (LSE:SPRT) 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, Spirit Pub Co's WACC % is 0.00%. Spirit Pub Co's ROIC % is 15.38% (calculated using TTM income statement data). Spirit Pub Co 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. Spirit Pub Co 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.

Spirit Pub Co ROIC % Related Terms

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Spirit Pub Co (LSE:SPRT) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Travel & Leisure » Spirit Pub Co PLC (LSE:SPRT) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

Website

http://www.spiritpubcompany.com

Spirit Pub Co PLC was incorporated in England. The Company's trading activities are divided into two divisions; namely a Managed division and a Leased division. The Managed division involves pubs that are directly managed by the Group, and a Leased division which involves the granting of leases to licensees who run the pub as their own business, paying rent to the Group, purchasing beer and other drinks from the Group and entering into profit sharing arrangements for income from leisure machines. The Company holds 794 Managed pubs and 433 Leased pubs. The group operates solely in the United Kingdom.