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Creditison Co (TSE:8253) ROIC % : 2.72% (As of Dec. 2023)


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What is Creditison 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 %. Creditison Co's annualized return on invested capital (ROIC %) for the quarter that ended in Dec. 2023 was 2.72%.

As of today (2024-05-10), Creditison Co's WACC % is 1.47%. Creditison Co's ROIC % is 2.29% (calculated using TTM income statement data). Creditison 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.


Creditison Co ROIC % Historical Data

The historical data trend for Creditison 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.

Creditison Co ROIC % Chart

Creditison Co Annual Data
Trend Mar14 Mar15 Mar16 Mar17 Mar18 Mar19 Mar20 Mar21 Mar22 Mar23
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 2.00 2.11 1.88 1.73 2.00

Creditison Co 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 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 2.47 0.88 2.33 2.56 2.72

Competitive Comparison of Creditison Co's ROIC %

For the Credit Services subindustry, Creditison 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.


Creditison Co's ROIC % Distribution in the Credit Services Industry

For the Credit Services industry and Financial Services sector, Creditison Co's ROIC % distribution charts can be found below:

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



Creditison Co ROIC % Calculation

Creditison 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 )
=93316 * ( 1 - 28.15% )/( (3244421 + 3472720)/ 2 )
=67047.546/3358570.5
=2.00 %

where

Creditison 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 )
=136904 * ( 1 - 25.35% )/( (3652772 + 3870633)/ 2 )
=102198.836/3761702.5
=2.72 %

where

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.


Creditison Co  (TSE:8253) 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, Creditison Co's WACC % is 1.47%. Creditison Co's ROIC % is 2.29% (calculated using TTM income statement data). Creditison 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. Creditison 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.


Creditison Co ROIC % Related Terms

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Creditison Co (TSE:8253) Business Description

Traded in Other Exchanges
Address
1-1 Higashi-Ikebukuro 3-chome, 52nd Floor, Sunshine 60 Building, Toshima-ku, Tokyo, JPN, 170-6073
Credit Saison Co Ltd is a consumer finance company operating primarily in Japan. Saison operates in five reportable business segments: credit services, leasing, finance, real estate, and entertainment. Of these, credit services make up the vast majority of revenue. The company is one of Japan's leading card companies. The company issues Visa, MasterCard, American Express, and affinity cards carrying the Saison brand to a multitude of cardholders. Saison also provides insurance and asset management. The company is affiliated with the Mizuho Financial Group.

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