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ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 23andMe Holding Co's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was -66.30%.
As of today (2024-05-11), 23andMe Holding Co's WACC % is 7.86%. 23andMe Holding Co's ROIC % is -57.95% (calculated using TTM income statement data). 23andMe Holding Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The historical data trend for 23andMe Holding 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.
23andMe Holding Co Annual Data | |||||||||
Trend | Mar20 | Mar21 | Mar22 | Mar23 | |||||
ROIC % | - | -81.35 | -57.94 | -50.98 |
23andMe Holding Co Quarterly Data | ||||||||||||||||
Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | |
ROIC % | Get a 7-Day Free Trial | -58.47 | -42.38 | -69.36 | -52.80 | -66.30 |
For the Diagnostics & Research subindustry, 23andMe Holding 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.
For the Medical Diagnostics & Research industry and Healthcare sector, 23andMe Holding Co's ROIC % distribution charts can be found below:
* The bar in red indicates where 23andMe Holding Co's ROIC % falls into.
23andMe Holding Co's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Mar. 2023 is calculated as:
ROIC % (A: Mar. 2023 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (A: Mar. 2022 ) | + | Invested Capital (A: Mar. 2023 )) | / count ) |
= | -324.011 * ( 1 - 0.88% ) | / | ( (635.9 | + | 624.005) | / 2 ) |
= | -321.1597032 | / | 629.9525 | |||
= | -50.98 % |
where
Invested Capital | (A: Mar. 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 | )) |
= | 1152.068 | - | 67.62 | - | ( 553.182 | - | max(0, 153.241 | - | 601.789 | + | 553.182 | )) |
= | 635.9 |
Invested Capital | (A: Mar. 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 | )) |
= | 942.598 | - | 43.017 | - | ( 386.849 | - | max(0, 149.416 | - | 424.992 | + | 386.849 | )) |
= | 624.005 |
23andMe Holding Co's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Dec. 2023 is calculated as:
ROIC % (Q: Dec. 2023 ) | ||||||
= | NOPAT | / | Average Invested Capital | |||
= | Operating Income * ( 1 - Tax Rate % ) | / | ( (Invested Capital (Q: Sep. 2023 ) | + | Invested Capital (Q: Dec. 2023 )) | / count ) |
= | -323.652 * ( 1 - -0.01% ) | / | ( (571.632 | + | 404.752) | / 2 ) |
= | -323.6843652 | / | 488.192 | |||
= | -66.30 % |
where
Invested Capital | (Q: Sep. 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 | )) |
= | 801.23 | - | 33.204 | - | ( 256.386 | - | max(0, 101.601 | - | 297.995 | + | 256.386 | )) |
= | 571.632 |
Invested Capital | (Q: 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 | )) |
= | 608.211 | - | 37.639 | - | ( 242.418 | - | max(0, 144.139 | - | 309.959 | + | 242.418 | )) |
= | 404.752 |
Note: The Operating Income data used here is four times the quarterly (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.
23andMe Holding Co (NAS:ME) 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, 23andMe Holding Co's WACC % is 7.86%. 23andMe Holding Co's ROIC % is -57.95% (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.
Thank you for viewing the detailed overview of 23andMe Holding Co's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Kathy L Hibbs | officer: See Remarks | C/O VIROLOGIC, 345 OYSTER POINT BLVD, SOUTH SAN FRANCISCO CA 94080 |
William G Richards | officer: Head of Therapeutics Discovery | 160 KELLY AVE, HALF MOON BAY CA 94019 |
Richard H Scheller | director | C/O GENENTECH INC, 1 DNA WAY MS 49, SOUTH SAN FRANCISCO CA 94080-4990 |
Joseph Anthony Selsavage | officer: Interim CFO | 490 HILL STREET, APT 5, SAN FRANCISCO CA 94114 |
Kenneth J. Hillan | officer: Head of Therapeutics | C/O ACHAOGEN, INC., 7000 SHORELINE COURT, SUITE 371, SOUTH SAN FRANCISCO CA 94080 |
Evan Lovell | director, officer: Chief Financial Officer | 27 SOUTH PARK STREET, SUITE 200, SAN FRANCISCO CA 94107 |
Hernandez Sandra R Md | director | BLACKBAUD INC, 2000 DANIEL ISLAND DRIVE, CHARLESTON SC 29492 |
Paul D Johnson | officer: VP, General Manager-Consumer | 440 N BARRANCA AVE #3550, COVINA CA 91723 |
Tracy Keim | officer: See Remarks | 6107 ARROWROOT LANE, RANCHO PALOS VERDES CA 90275 |
Steven Lemon | officer: Vice President, Engineering | 1020 CHERRY AVENUE, SAN JOSE CA 95125 |
Steven J Schoch | officer: See Remarks | 2748 BUSH STREET, SAN FRANCISCO CA 94115 |
Frederick Mark Kohler | officer: Vice President, People | 1004 UNION STREET, ALAMEDA CA 94501 |
Sequoia Capital Global Growth Ii Principals Fund, L.p. | 10 percent owner | 2800 SAND HILL ROAD, SUITE 101, MENLO PARK CA 94025 |
Abeec 2.0, Llc | 10 percent owner | 171 MAIN STREET, SUITE 259, LOS ALTOS CA 94022 |
Anne Wojcicki | director, 10 percent owner, officer: Chief Executive Officer | C/O AJAX I HOLDINGS, LLC, 667 MADISON AVENUE, NEW YORK NY 10606 |
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