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Stocks C / Cree Inc.


Subject:  Re: The future of Cree: Part III Date:  6/23/2000  3:39 AM
Author:  madmarv Number:  2634 of 41734

Just took a whirl at the ROIC calc. Here's what I got.

TTM Operating Income $29.9M
Less 35% tax 10.5M
After tax Op Income 19.4M

Invested capital computed from the following:

IC = Total Assets - Current Liabilities - Cash - ST Investments - LT Investments + Account Payables

Qtr IC
June 99 94 M
Sep 99 98 M
Dec 99 108 M
Mar 00 129 M

Average IC 107 M

ROIC = 19.4 / 107 = 18.1%

CREE has no Debt so all Current Liabilities are deducted.

As a compromise to excluding all cash & equivalents I added back just enough cash for CREE to cover their payables.

LT investments were excluded from IC because they were purchased w/ money from the secondary offering. Adding them back in dillutes ROIC to 15.3%

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