America's Car-Mart (America's Car-Mart) ROC % : 1.49% (As of Jan. 2024)

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What is America's Car-Mart ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. America's Car-Mart's annualized return on capital (ROC %) for the quarter that ended in Jan. 2024 was 1.49%.

As of today (2024-04-29), America's Car-Mart's WACC % is 7.52%. America's Car-Mart's ROC % is 1.23% (calculated using TTM income statement data). America's Car-Mart earns returns that do not match up to its cost of capital. It will destroy value as it grows.

America's Car-Mart ROC % Historical Data

The historical data trend for America's Car-Mart's ROC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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America's Car-Mart ROC % Chart

America's Car-Mart Annual Data

Trend

Apr14

Apr15

Apr16

Apr17

Apr18

Apr19

Apr20

Apr21

Apr22

Apr23

ROC %

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11.84

10.90

15.93

10.81

4.09

America's Car-Mart Quarterly Data
	Apr19	Jul19	Oct19	Jan20	Apr20	Jul20	Oct20	Jan21	Apr21	Jul21	Oct21	Jan22	Apr22	Jul22	Oct22	Jan23	Apr23	Jul23	Oct23	Jan24
ROC %	Get a 7-Day Free Trial															3.04	4.13	4.45	-4.02	1.49

America's Car-Mart ROC % Calculation

America's Car-Mart's annualized Return on Capital (ROC %) for the fiscal year that ended in Apr. 2023 is calculated as:

	ROC % (A: Apr. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Apr. 2022 )	+	Invested Capital (A: Apr. 2023 ))	/ count )
=	64.467 * ( 1 - 20.79% )	/	( (1120.109	+	1375.267)	/ 2 )
=	51.0643107	/	1247.688
=	4.09 %

where

	Invested Capital		(A: Apr. 2022 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	1154.696	-	27.671	-	( 6.916	-	max(0, 27.671	-	1041.833	+	6.916	))
=	1120.109

	Invested Capital		(A: Apr. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	1420.431	-	35.368	-	( 9.796	-	max(0, 35.368	-	1287.891	+	9.796	))
=	1375.267

America's Car-Mart's annualized Return on Capital (ROC %) for the quarter that ended in Jan. 2024 is calculated as:

	ROC % (Q: Jan. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Oct. 2023 )	+	Invested Capital (Q: Jan. 2024 ))	/ count )
=	26.032 * ( 1 - 17.4% )	/	( (1450.947	+	1426.366)	/ 2 )
=	21.502432	/	1438.6565
=	1.49 %

where

	Invested Capital		(Q: Oct. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	1487.149	-	31.889	-	( 4.313	-	max(0, 323.215	-	1324.34	+	4.313	))
=	1450.947

	Invested Capital		(Q: Jan. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	1466.947	-	36.342	-	( 4.239	-	max(0, 210.129	-	1297.858	+	4.239	))
=	1426.366

Note: The Operating Income data used here is four times the quarterly (Jan. 2024) data.

America's Car-Mart (NAS:CRMT) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, America's Car-Mart's WACC % is 7.52%. America's Car-Mart's ROC % is 1.23% (calculated using TTM income statement data). America's Car-Mart earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Be Aware

Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

America's Car-Mart ROC % Related Terms

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America's Car-Mart (America's Car-Mart) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » America's Car-Mart Inc (NAS:CRMT) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

1805 North 2nd Street, Suite 401, Rogers, AR, USA, 72756

Website

https://www.car-mart.com

America's Car-Mart Inc is an automotive retailer in us focused exclusively on the Integrated Auto Sales and Finance segment of the used car market. The Company's operations are principally conducted through its two operating subsidiaries, America's Car Mart Inc and Colonial Auto Finance. It primarily sells older model used vehicles and provides financing for substantially all of its customers. The Company earns revenue from the sale of used vehicles and in most cases a related service contract and an accident protection plan product, as well as interest income and late fees from the related financing.

Executives

Magnolia Capital Fund, Lp	10 percent owner	1601 DODGE STREET, SUITE 3300, OMAHA NE 68102
Campbell Douglas W. Jr.	officer: President	C/O AMERICA'S CAR-MART, INC., 1805 NORTH 2ND STREET, SUITE 401, ROGERS AR 72756
Joshua G Welch	director	C/O VICUNA ADVISORS LLC, PO BOX 427, STONINGTON CT 06378
Julia K. Davis	director	C/O AMERICA'S CAR-MART, INC., 1805 NORTH 2ND STREET, SUITE 401, ROGERS AR 72756
Leonard L. Walthall	officer: Chief Operating Officer	1805 N. 2ND STREET, SUITE 401, ROGERS AR 72756
Dawn C Morris	director	255 E. FIFTH STREET, CINCINNATI OH 45202
William H Henderson	director, officer: President and CEO	C/O AMERICA'S CARMART, 1805 NORTH 2ND STREET, SUITE 401, ROGERS AR 72756
Gremp Jim Von	director	C/O AMERICA'S CAR-MART, INC., 802 SE PLAZA AVE, SUITE 200, BENTONVILLE AR 72712
Ann G. Bordelon	director	C/O AMERICA'S CAR-MART, INC., 1805 N. 2ND STREET, SUITE 401, ROGERS AR 72756
Daniel J Englander	director	C/O AMERICA'S CARMART, 802 SOUTHEAST PLAZA AVE #200, BENTONVILLE AR 72712
Ray C Dillon	director	C/O AMERICA'S CAR-MART, INC., 1805 N. 2ND STREET, SUITE 401, ROGERS AR 72756
Robert Cameron Smith	director	802 SOUTHEAST PLAZA AVENUE, SUITE 200, BENTONVILLE AR 72712
Vickie D. Judy	officer: Principal Accounting Officer	C/O AMERICA'S CAR-MART, INC., 1805 N. 2ND STREET, SUITE 401, ROGERS AR 72756
Eddie L Hight	officer: Chief Operating Officer	C/O AMERICA'S CARMART, 802 SOUTHEAST PLAZA AVE, #200, BENTONVILLE AR 72712
Adam K Peterson	10 percent owner	1601 DODGE STREET, SUITE 3300, OMAHA NE 68102