The ROIC of Ponsse Oyj is 11.32%
Return on invested capital (ROIC) is a financial ratio that measures how efficient a company is at allocating the capital under its control to profitable investments.
= NOPAT / Invested capital = EBIT * (1 - tax rate) / (2-year average liabilities + 2-year average shareholder equity)
Return on invested capital (ROIC) ratio gives investors a sense of how well a company is using money under its control to generate profitable returns.
ROIC can be used as a benchmark to calculate the valuation of companies across industries. A higher ROIC means the company is doing a better job of investing the money from shareholders and bondholders to run the business. A company is creating value if its ROIC exceeds 2%. If its ROIC is under 2%, the company is likely destroying value and has no excess capital to invest in future growth.
You can calculate ROIC with the following formula:
NOPAT = Net operating profit after tax
Invested Capital = Average total liabilities + Average shareholders' equity
The averages of liabilities and shareholders' equity are calculated as geometrical averages of the last two annual values from the company's balance sheet.
Ponsse Oyj, together with its subsidiaries, develops, manufactures, and sells cut-to-length forest machines Northern Europe, Central and Southern Europe, Russia and Asia, North and South America, and internationally. Its products include harvesters, forwarders, harvester heads, and dual machines. The company also offers information system products, such as harvester and forwarder systems; forest machine; and wood procurement systems; and simulators. In addition, it provides spare parts; and used machines. Ponsse Oyj was founded in 1970 and is headquartered in Vieremä, Finland.