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Sumitomo ROIC

What is the ROIC of Sumitomo?

The ROIC of Sumitomo Corp. is 2.81%

What is the definition of ROIC?



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.

ROIC of companies in the Industrials sector on OTC compared to Sumitomo

What does Sumitomo do?

Sumitomo Corporation imports, exports, and sells various goods and commodities worldwide. The company's Metal Products segment offers steel sheets and tubular products; and non-ferrous metals, such as aluminum and titanium. Its Transportation & Construction Systems segment manufactures, sells, services, leases, and finances ships, aircrafts, motor vehicles, construction equipment, and related components and parts. The company's Infrastructure segment provides power generation; power plant engineering, procurement, and construction services; retails electricity; and offers delivery, customs clearance, transportation, and insurance services. It also engages in the development and operation of industrial parks; and industrial facilities and equipment, water, transportation systems and infrastructure, airports, smart city project, environmental solutions, and storage battery businesses. Its Media & Digital segment engages in the cable television, 5G related technologies, multi-channel programming distribution, movies, digital media-related, video content-related, TV shopping, e-commerce, ICT platform, digital solution, corporate venture capital, cell phones, and smart communications platform businesses, as well as provision of value-added services. The company's Living Related & Real Estate segment operates food supermarkets and drugstore chains; offers vegetables, fruits, and meats; and trades in cement, wood, building materials, and biomass, as well as buildings, retail facilities, residences, logistics facilities, and real estate funds. Its Mineral Resources, Energy, Chemical & Electronics segment develops and trades in mineral and energy resources, commodity derivatives, liquefied petroleum gas, battery, carbon products, plastics, organic and inorganic chemicals, silicon wafers, LEDs, pharmaceuticals, agricultural chemicals, household insecticide, fertilizers, and veterinary drugs. Sumitomo Corporation was incorporated in 1919 and is headquartered in Tokyo, Japan.

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