ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Doctorglasses Chain Co's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2024 was 13.00%.
As of today (2024-05-26), Doctorglasses Chain Co's WACC % is 9.52%. Doctorglasses Chain Co's ROIC % is 15.31% (calculated using TTM income statement data).
Doctorglasses Chain 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.
* 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 Doctorglasses Chain Co's ROIC %
For the Specialty Retail subindustry, Doctorglasses Chain 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.
Doctorglasses Chain Co's ROIC % Distribution in the Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, Doctorglasses Chain Co's ROIC % distribution charts can be found below:
* The bar in red indicates where Doctorglasses Chain Co's ROIC % falls into.
Doctorglasses Chain Co ROIC % Calculation
Doctorglasses Chain Co's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:
Note:
The Operating Income data used here is four times the quarterly (Mar. 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.
Doctorglasses Chain Co (SZSE:300622) 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, Doctorglasses Chain Co's WACC % is 9.52%. Doctorglasses Chain Co's ROIC % is 15.31% (calculated using TTM income statement data).
Doctorglasses Chain 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.
Doctorglasses Chain 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.
Doctorglasses Chain Co ROIC % Related Terms
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Doctorglasses Chain Co (SZSE:300622) Business Description
Doctorglasses Chain Co Ltd operates as a retail chain company which is engaged in the eyeglasses business in China. The company offers glasses under the President optical and doctor glasses Zele brand name. It offers reading glasses, sunglasses, frames and lenses, contact lenses, contact lens liquid solution and others.
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