PPK Group (ASX:PPK) ROC % : -24.10% (As of Dec. 2023)

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What is PPK Group 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 %. PPK Group's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -24.10%.

As of today (2024-05-20), PPK Group's WACC % is 13.96%. PPK Group's ROC % is -21.99% (calculated using TTM income statement data). PPK Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

PPK Group ROC % Historical Data

The historical data trend for PPK Group'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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PPK Group ROC % Chart

PPK Group Annual Data

Trend

Jun14

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

ROC %

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-6.71

-10.11

-9.24

-22.11

-18.65

PPK Group Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial															-34.84	-18.85	-20.39	-18.73	-24.10

PPK Group ROC % Calculation

PPK Group's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2023 is calculated as:

	ROC % (A: Jun. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2022 )	+	Invested Capital (A: Jun. 2023 ))	/ count )
=	-15.16 * ( 1 - 6.09% )	/	( (67.033	+	85.66)	/ 2 )
=	-14.236756	/	76.3465
=	-18.65 %

where

	Invested Capital		(A: Jun. 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	))
=	120.976	-	1.672	-	( 53.008	-	max(0, 3.387	-	55.658	+	53.008	))
=	67.033

	Invested Capital		(A: Jun. 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	))
=	135.58	-	10.05	-	( 39.999	-	max(0, 18.057	-	57.927	+	39.999	))
=	85.66

PPK Group's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

	ROC % (Q: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-21.072 * ( 1 - 0.77% )	/	( (85.66	+	87.892)	/ 2 )
=	-20.9097456	/	86.776
=	-24.10 %

where

	Invested Capital		(Q: Jun. 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	))
=	135.58	-	10.05	-	( 39.999	-	max(0, 18.057	-	57.927	+	39.999	))
=	85.66

	Invested Capital		(Q: Dec. 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	))
=	129.593	-	11.368	-	( 34.07	-	max(0, 20.023	-	50.356	+	34.07	))
=	87.892

Note: The Operating Income data used here is two times the semi-annual (Dec. 2023) data.

PPK Group (ASX:PPK) 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, PPK Group's WACC % is 13.96%. PPK Group's ROC % is -21.99% (calculated using TTM income statement data). PPK Group 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.

PPK Group ROC % Related Terms

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PPK Group (ASX:PPK) Business Description

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PLPKF:USA

Address

10 Eagle Street, Level 27, Brisbane, QLD, AUS, 4000

Website

https://www.ppkgroup.com.au

PPK Group Ltd invests in publicly listed and privately held business, property ownership, and the manufacture of high-grade boron nitride nanotubes. The group invests capital and expertise in high-potential science and technology opportunities with a current focus on nanomaterials, artificial intelligence, and energy storage solutions. It operates in the technology Segment. It is also engaged in ballistic armor and dental products. The company generates the majority of its revenue from the Energy storage business.

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