GURUFOCUS.COM » STOCK LIST » Technology » Software » Daiwa Computer Co Ltd (TSE:3816) » Definitions » ROIC %

Daiwa Computer Co (TSE:3816) ROIC % : 10.75% (As of Jan. 2024)


View and export this data going back to 2006. Start your Free Trial

What is Daiwa Computer 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 %. Daiwa Computer Co's annualized return on invested capital (ROIC %) for the quarter that ended in Jan. 2024 was 10.75%.

As of today (2024-06-09), Daiwa Computer Co's WACC % is 4.88%. Daiwa Computer Co's ROIC % is 15.56% (calculated using TTM income statement data). Daiwa Computer 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.


Daiwa Computer Co ROIC % Historical Data

The historical data trend for Daiwa Computer 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.

* Premium members only.

Daiwa Computer Co ROIC % Chart

Daiwa Computer Co Annual Data
Trend Jul14 Jul15 Jul16 Jul17 Jul18 Jul19 Jul20 Jul21 Jul22 Jul23
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 13.21 14.05 13.77 14.63 14.38

Daiwa Computer Co Quarterly Data
Apr19 Jul19 Oct19 Jan20 Apr20 Jul20 Oct20 Jan21 Apr21 Jul21 Oct21 Jan22 Apr22 Jul22 Oct22 Jan23 Apr23 Jul23 Oct23 Jan24
ROIC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 18.50 18.68 9.00 21.05 10.75

Competitive Comparison of Daiwa Computer Co's ROIC %

For the Software - Application subindustry, Daiwa Computer 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.


Daiwa Computer Co's ROIC % Distribution in the Software Industry

For the Software industry and Technology sector, Daiwa Computer Co's ROIC % distribution charts can be found below:

* The bar in red indicates where Daiwa Computer Co's ROIC % falls into.



Daiwa Computer Co ROIC % Calculation

Daiwa Computer Co's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Jul. 2023 is calculated as:

ROIC % (A: Jul. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Jul. 2022 ) + Invested Capital (A: Jul. 2023 ))/ count )
=503.616 * ( 1 - 36.14% )/( (2099.792 + 2372.142)/ 2 )
=321.6091776/2235.967
=14.38 %

where

Invested Capital(A: Jul. 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))
=5245.464 - 85.318 - ( 3180.622 - max(0, 570.412 - 3630.766+3180.622))
=2099.792

Invested Capital(A: Jul. 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))
=5759.163 - 130.899 - ( 3262.388 - max(0, 575.344 - 3831.466+3262.388))
=2372.142

Daiwa Computer Co's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jan. 2024 is calculated as:

ROIC % (Q: Jan. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Oct. 2023 ) + Invested Capital (Q: Jan. 2024 ))/ count )
=562.296 * ( 1 - 55.7% )/( (2420.611 + 2214.467)/ 2 )
=249.097128/2317.539
=10.75 %

where

Invested Capital(Q: Oct. 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))
=5810.042 - 102.28 - ( 3295.867 - max(0, 594.967 - 3882.118+3295.867))
=2420.611

Invested Capital(Q: Jan. 2024 )
=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))
=5822.339 - 142.476 - ( 3465.396 - max(0, 545.599 - 4036.138+3465.396))
=2214.467

Note: The Operating Income data used here is four times the quarterly (Jan. 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.


Daiwa Computer Co  (TSE:3816) 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, Daiwa Computer Co's WACC % is 4.88%. Daiwa Computer Co's ROIC % is 15.56% (calculated using TTM income statement data). Daiwa Computer 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. Daiwa Computer 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.


Daiwa Computer Co ROIC % Related Terms

Thank you for viewing the detailed overview of Daiwa Computer Co's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.


Daiwa Computer Co (TSE:3816) Business Description

Traded in Other Exchanges
N/A
Address
36-18, Wakamatsu-Cho, Takatsuki-Shi, Osaka, JPN, 569-0054
Daiwa Computer Co Ltd is engaged in designing business applications, web-related system, software development, operation support, system consulting, related equipment sales, development and sale of packaged software, consulting, SaaS/ASP service. It also engaged in the production, processing, and sale of agricultural crops.

Daiwa Computer Co (TSE:3816) Headlines

No Headlines