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BOW (Bowhead Specialty Holdings) ROIC % : 2.11% (As of Jun. 2024)


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What is Bowhead Specialty Holdings 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 %. Bowhead Specialty Holdings's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2024 was 2.11%.

As of today (2024-10-29), Bowhead Specialty Holdings's WACC % is 10.27%. Bowhead Specialty Holdings's ROIC % is 0.77% (calculated using TTM income statement data). Bowhead Specialty Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.


Bowhead Specialty Holdings ROIC % Historical Data

The historical data trend for Bowhead Specialty Holdings'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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Bowhead Specialty Holdings ROIC % Chart

Bowhead Specialty Holdings Annual Data
Trend Dec22 Dec23
ROIC %
- -

Bowhead Specialty Holdings Quarterly Data
Dec22 Mar23 Jun23 Dec23 Mar24 Jun24
ROIC % Get a 7-Day Free Trial - 842.26 - - 2.11

Competitive Comparison of Bowhead Specialty Holdings's ROIC %

For the Insurance - Property & Casualty subindustry, Bowhead Specialty Holdings'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.


Bowhead Specialty Holdings's ROIC % Distribution in the Insurance Industry

For the Insurance industry and Financial Services sector, Bowhead Specialty Holdings's ROIC % distribution charts can be found below:

* The bar in red indicates where Bowhead Specialty Holdings's ROIC % falls into.



Bowhead Specialty Holdings ROIC % Calculation

Bowhead Specialty Holdings'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
=EBIT * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2022 ) + Invested Capital (A: Dec. 2023 ))/ count )
=0 * ( 1 - 22.01% )/( (472.6961 + 868.5779)/ 2 )
=0/670.637
=0.00 %

where

Invested Capital(A: Dec. 2022 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Balance Sheet Cash And Cash Equivalents - 5% * Revenue )
=565.207 - 37.232 - ( 64.659 - 5% * 187.602 )
=472.6961

Invested Capital(A: Dec. 2023 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Balance Sheet Cash And Cash Equivalents - 5% * Revenue )
=1027.859 - 55.382 - ( 118.07 - 5% * 283.418 )
=868.5779

Bowhead Specialty Holdings's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Jun. 2024 is calculated as:

ROIC % (Q: Jun. 2024 )
=NOPAT/Average Invested Capital
=EBIT * ( 1 - Tax Rate % )/( (Invested Capital (Q: Mar. 2024 ) + Invested Capital (Q: Jun. 2024 ))/ count )
=30.536 * ( 1 - 25.33% )/( (1002.9849 + 1162.711)/ 2 )
=22.8012312/1082.84795
=2.11 %

where

Invested Capital(Q: Mar. 2024 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Balance Sheet Cash And Cash Equivalents - 5% * Revenue )
=1114.545 - 42.607 - ( 73.485 - 5% * 90.638 )
=1002.9849

Invested Capital(Q: Jun. 2024 )
=Total Assets - Accounts Payable & Accrued Expense - Excess Cash
=Total Assets - Accounts Payable & Accrued Expense - ( Balance Sheet Cash And Cash Equivalents - 5% * Revenue )
=1395.173 - 57.083 - ( 180.324 - 5% * 98.9 )
=1162.711

Note: The EBIT data used here is four times the quarterly (Jun. 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.


Bowhead Specialty Holdings  (NYSE:BOW) 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, Bowhead Specialty Holdings's WACC % is 10.27%. Bowhead Specialty Holdings's ROIC % is 0.77% (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.


Bowhead Specialty Holdings ROIC % Related Terms

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Bowhead Specialty Holdings Business Description

Comparable Companies
Traded in Other Exchanges
N/A
Address
1411 Broadway, Suite 3800, New York, NY, USA, 10018
Bowhead Specialty Holdings Inc is engaged in providing specialty P&C products. It is a specialty insurance group that generates revenues by underwriting and offering a variety of specialty insurance products to domestic markets through three distinct underwriting divisions: Casualty, Professional Liability and Healthcare. Casualty specialize in GL coverage for risks in the construction, distribution, heavy manufacturing, real estate and hospitality segments and also consider underwriting risks in a broader range of industries. Key revenue is generated from Casualty segment.