Target's Return on Invested Capital (ROIC), a key metric for evaluating its Return on Investment (ROI), stands at 11.50%. This figure indicates how effectively Target converts the capital it has raised into profits.
Understanding Target's Return on Investment
Return on Invested Capital (ROIC) provides a comprehensive view of a company's financial performance by measuring the percentage return that a company earns on the capital it has invested. It considers all capital, both debt and equity, used to fund operations and growth.
Target's ROIC vs. Cost of Capital
As of today, December 5, 2024, Target's ROIC of 11.50% significantly exceeds its Weighted Average Cost of Capital (WACC), which is 8.53%. This is a crucial indicator of financial health and efficient capital deployment.
- ROIC (Return on Invested Capital): 11.50%
- WACC (Weighted Average Cost of Capital): 8.53%
The fact that Target's ROIC (11.50%) is higher than its WACC (8.53%) signifies that the company is generating higher returns on its investments than the cost it incurs to raise that capital. This demonstrates that Target is effectively deploying its capital and earning excess returns, creating value for its shareholders.
Key Financial Metrics for Target (as of 2024-12-05)
| Metric | Value | Description |
|---|---|---|
| Return on Invested Capital (ROIC) | 11.50% | Measures the percentage return on all capital invested in the business. |
| Weighted Average Cost of Capital (WACC) | 8.53% | The average rate of return a company expects to pay to all its capital providers. |
Target's ROIC is calculated using trailing twelve months (TTM) income statement data, providing a current snapshot of its operational efficiency in generating returns from its invested capital. This strong performance highlights Target's ability to efficiently manage its capital structure and investment strategies to yield profitable outcomes.
