Servizi Italia SpA (MIL:SRI) ROIC % : 2.92% (As of Sep. 2023)

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What is Servizi Italia SpA 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 %. Servizi Italia SpA's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2023 was 2.92%.

As of today (2024-05-19), Servizi Italia SpA's WACC % is 6.34%. Servizi Italia SpA's ROIC % is 1.79% (calculated using TTM income statement data). Servizi Italia SpA earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Servizi Italia SpA ROIC % Historical Data

The historical data trend for Servizi Italia SpA'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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Servizi Italia SpA ROIC % Chart

Servizi Italia SpA Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROIC %

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2.60

-0.36

0.90

-1.20

1.81

Servizi Italia SpA Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROIC %	Get a 7-Day Free Trial															-0.74	1.14	5.51	2.92	-6.63

Competitive Comparison of Servizi Italia SpA's ROIC %

For the Specialty Business Services subindustry, Servizi Italia SpA'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.

Servizi Italia SpA's ROIC % Distribution in the Business Services Industry

For the Business Services industry and Industrials sector, Servizi Italia SpA's ROIC % distribution charts can be found below:

* The bar in red indicates where Servizi Italia SpA's ROIC % falls into.

Servizi Italia SpA ROIC % Calculation

Servizi Italia SpA'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 )
=	7.514 * ( 1 - 12.76% )	/	( (371.486	+	353.365)	/ 2 )
=	6.5552136	/	362.4255
=	1.81 %

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	))
=	403.037	-	104.334	-	( 18.165	-	max(0, 188.918	-	116.135	+	18.165	))
=	371.486

	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	))
=	399.007	-	110.397	-	( 4.731	-	max(0, 175.798	-	111.043	+	4.731	))
=	353.365

Servizi Italia SpA's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROIC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	12.468 * ( 1 - 14.67% )	/	( (366.253	+	362.118)	/ 2 )
=	10.6389444	/	364.1855
=	2.92 %

where

	Invested Capital		(Q: Jun. 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	))
=	406.143	-	104.887	-	( 11.388	-	max(0, 183.114	-	118.117	+	11.388	))
=	366.253

	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	))
=	399.633	-	102.69	-	( 4.165	-	max(0, 177.425	-	112.25	+	4.165	))
=	362.118

Note: The Operating Income data used here is four times the quarterly (Sep. 2023) data.

Servizi Italia SpA (MIL:SRI) 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, Servizi Italia SpA's WACC % is 6.34%. Servizi Italia SpA's ROIC % is 1.79% (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.

Servizi Italia SpA ROIC % Related Terms

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Servizi Italia SpA (MIL:SRI) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Business Services » Servizi Italia SpA (MIL:SRI) » Definitions » ROIC %

Comparable Companies

Traded in Other Exchanges

SRIm:UK

Address

Via San Pietro 59/B, Castellina di Soragna, ITA, 43019

Website

https://www.servizitaliagroup.com

Servizi Italia SpA is an Italy-based company. Together with its subsidiaries, the firm operates in three segments including Wash hire, Linen sterilisation, and Sterilisation of surgical instruments. Wash hire segment includes planning and provision of integrated hire, reconditioning and logistics services for textile items, mattresses, and accessories. Linen sterilisation includes the planning and rental of sterile medical devices. Sterilisation of surgical instruments includes planning and provision of washing, packaging and sterilisation services for surgical instruments and accessories. The majority of the revenues are generated from the Wash Hire segment. The group operates in Turkey, Brazil, and Italy, out of which the majority of the revenue comes from Italy.