Sainsbury (J) (Sainsbury (J)) ROC % : -9.69% (As of Feb. 2024)

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What is Sainsbury (J) 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 %. Sainsbury (J)'s annualized return on capital (ROC %) for the quarter that ended in Feb. 2024 was -9.69%.

As of today (2024-04-27), Sainsbury (J)'s WACC % is 7.12%. Sainsbury (J)'s ROC % is 0.80% (calculated using TTM income statement data). Sainsbury (J) earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Sainsbury (J) ROC % Historical Data

The historical data trend for Sainsbury (J)'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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Sainsbury (J) ROC % Chart

Sainsbury (J) Annual Data

Trend

Mar14

Feb15

Feb16

Feb17

Feb18

Feb19

Feb20

Feb21

Feb22

Feb23

ROC %

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2.19

1.56

0.85

3.55

1.31

Sainsbury (J) Semi-Annual Data
	Mar14	Sep14	Mar15	Sep15	Mar16	Sep16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Feb23	Aug23	Feb24
ROC %	Get a 7-Day Free Trial															3.90	5.54	0.97	2.30	-9.69

Sainsbury (J) ROC % Calculation

Sainsbury (J)'s annualized Return on Capital (ROC %) for the fiscal year that ended in Feb. 2023 is calculated as:

	ROC % (A: Feb. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Feb. 2022 )	+	Invested Capital (A: Feb. 2023 ))	/ count )
=	678.744 * ( 1 - 36.7% )	/	( (34993.234	+	30481.883)	/ 2 )
=	429.644952	/	32737.5585
=	1.31 %

where

	Invested Capital		(A: Feb. 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	))
=	36416.779	-	5642.76	-	( 1357.24	-	max(0, 13353.18	-	9133.965	+	1357.24	))
=	34993.234

	Invested Capital		(A: Feb. 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	))
=	31591.787	-	5594.203	-	( 2155.797	-	max(0, 14026.57	-	9542.271	+	2155.797	))
=	30481.883

Sainsbury (J)'s annualized Return on Capital (ROC %) for the quarter that ended in Feb. 2024 is calculated as:

	ROC % (Q: Feb. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Aug. 2023 )	+	Invested Capital (Q: Feb. 2024 ))	/ count )
=	250 * ( 1 - 1000.12% )	/	( (23451.08	+	22981.061)	/ 2 )
=	-2250.3	/	23216.0705
=	-9.69 %

where

	Invested Capital		(Q: Aug. 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	))
=	33251.588	-	13872.935	-	( 2672.173	-	max(0, 14731.893	-	10659.466	+	2672.173	))
=	23451.08

	Invested Capital		(Q: Feb. 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	))
=	31642.677	-	13549.242	-	( 2530.303	-	max(0, 14459.596	-	9571.97	+	2530.303	))
=	22981.061

Note: The Operating Income data used here is two times the semi-annual (Feb. 2024) data.

Sainsbury (J) (OTCPK:JSAIY) 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, Sainsbury (J)'s WACC % is 7.12%. Sainsbury (J)'s ROC % is 0.80% (calculated using TTM income statement data). Sainsbury (J) 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.

Sainsbury (J) ROC % Related Terms

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Sainsbury (J) (Sainsbury (J)) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Retail - Defensive » Sainsbury (J) PLC (OTCPK:JSAIY) » Definitions » ROC %

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JSNSF:USA SBRYl:UK SBRY:UK SUY1:Germany

Address

33 Holborn, London, GBR, EC1N 2HT

Website

https://www.about.sainsburys.co.uk

Founded in 1869, Sainsbury's is the second-largest U.K. grocery chain with around 16% market share. It operates around 600 supermarkets and 800 convenience stores, all in the U.K. The company has diversified away from core food by selling clothing, telecom equipment, and other nonfood items. In September 2016, it took a step further into nonfood retailing with the purchase of Home Retail Group, operating the Habitat and Argos chains (general merchandise and electronics stores), for GBP 1.10 billion. It has been selling products online since 1997.

Sainsbury (J) (Sainsbury (J)) Headlines

From GuruFocus

Sainsbury (J) PLC Stock Is Believed To Be Modestly Undervalued

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