1/5/10 ROIC - How do I determine average?

[tdsimpson]

I am studing ISRG on ADVFN Financials (Many thanks to the fellow who shared that URL).

On the Intuitive Surgical Company Financial Information page, I found the following:

Return on Capital Invested (ROCI): 12.2
Return on Capital Invested (ROCI) - 5YEAR AVRG.: 9.5

So I thought I would see if I could get the same figure for the ROCI 5YEAR AVRG. of 9.5. So I pressed the "Historical Annual Reports" button to get the ROCI numbers for the last five years. Under the Profitability section I got:

2002: -28.1
2003: -3.4
2004: 7.5
2005: 21.3
2006: 12.2

When I add up the ROCI for these years, I get 9.5 and I have not divided by 5 yet. So that make me wonder if ROCI 5YEAR AVRG is really an average.

Did I do something wrong?

Thanks,

[rharmelink]

Originally Posted by tdsimpson

I am studing ISRG...[on AdvFN] I found the following:

Return on Capital Invested (ROCI): 12.2
Return on Capital Invested (ROCI) - 5YEAR AVRG.: 9.5

So I thought I would see if I could get the same figure for the ROCI 5YEAR AVRG. of 9.5. So I pressed the "Historical Annual Reports" button to get the ROCI numbers for the last five years. Under the Profitability section I got:

2002: -28.1
2003: -3.4
2004: 7.5
2005: 21.3
2006: 12.2

When I add up the ROCI for these years, I get 9.5 and I have not divided by 5 yet. So that make me wonder if ROCI 5YEAR AVRG is really an average.

Did I do something wrong?

I suspect the difference is because you're looking at fiscal year numbers and they are looking at rolling annual periods. That is, we're currently 9 months into 2007, which is running at 14.9 YTD. replace the -28.1 with 14.9 and you get an average of 10.5, but then you don't quite have 5 years of data.

[tdsimpson]

That make sense. Thanks for looking into this form me. Another set of eyes always helps.

[tinvesting]

roic is a tough one to figure out as you need to know how much excess cash is not needed to run the company. My calculators use my home grown roic to calculate the trend but I go to the MSN Money or ADVFN roic values for the real deal. M* doesnt publish roic values.

[valuedude]

I have a question. Maybe someone can help me with. But what happens when I have a dividend paying stock? Does that dividend get somehow programmed into when I do the ROIC or cashflow?

I'm curious as to how this dividend affects everything. I'm thinking that it's probably cashflow. Can anyone tell me please? thanks

Valuedude - -