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Mike,

Thanks very much for responding. Your comments have been extremely helpful to me!

Using SEC filings I have calculated the 3rd quarter 2008 ROIC for Atheros Communications, Inc. ATHR as follows:

ROIC = (1-t)(net revenue - operating expenses)/(Total assets - NIBCL)
= (1-.093)(374100-157456)/(615469-106384)
= (.907)(189644)/509084
= 172007/509084
= 33.78%

I obtained "t" from Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations, Provision for income taxes which states the effective tax rate as 9.3%.

Can you confirm my calculation. The 1st quarter 2007 ROIC for Atheros was 13.81 but the effective tax rate at that time was over 20%. If my calculation is correct should I expect year end filings to report a more modest ROIC for Atheros... a ROIC of 33.78 seems high to me but hey, what do I know?

Again, thanks for the guidance and on to the the WACC.

By the way, I see that the WACC is calculated using using TC (corporate tax rate). Is this the same as the effective tax rate I used in my ROIC calculations?

FB
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