Lotus Eye Hospital & Institute (BOM:532998) ROC % : 3.26% (As of Dec. 2023)

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What is Lotus Eye Hospital & Institute 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 %. Lotus Eye Hospital & Institute's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 3.26%.

As of today (2024-05-29), Lotus Eye Hospital & Institute's WACC % is 12.76%. Lotus Eye Hospital & Institute's ROC % is 5.31% (calculated using TTM income statement data). Lotus Eye Hospital & Institute earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Lotus Eye Hospital & Institute ROC % Historical Data

The historical data trend for Lotus Eye Hospital & Institute'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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Lotus Eye Hospital & Institute ROC % Chart

Lotus Eye Hospital & Institute Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

ROC %

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0.91

2.53

2.11

5.13

6.69

Lotus Eye Hospital & Institute Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROC %	Get a 7-Day Free Trial															7.32	3.82	9.27	4.93	3.26

Lotus Eye Hospital & Institute ROC % Calculation

Lotus Eye Hospital & Institute's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2023 is calculated as:

	ROC % (A: Mar. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2022 )	+	Invested Capital (A: Mar. 2023 ))	/ count )
=	47.125 * ( 1 - 27.86% )	/	( (504.86	+	511.702)	/ 2 )
=	33.995975	/	508.281
=	6.69 %

where

	Invested Capital		(A: Mar. 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	))
=	615.968	-	40.053	-	( 87.93	-	max(0, 57.566	-	128.621	+	87.93	))
=	504.86

	Invested Capital		(A: Mar. 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	))
=	631.88	-	36.872	-	( 83.306	-	max(0, 51.916	-	147.101	+	83.306	))
=	511.702

Lotus Eye Hospital & Institute'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: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	23.884 * ( 1 - 26.9% )	/	( (535.223	+	0)	/ 1 )
=	17.459204	/	535.223
=	3.26 %

where

	Invested Capital		(Q: Sep. 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	))
=	668.142	-	45.528	-	( 94.537	-	max(0, 76.737	-	164.128	+	94.537	))
=	535.223

	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	))
=	0	-	0	-	( 0	-	max(0, 0	-	0	+	0	))
=	0

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

Lotus Eye Hospital & Institute (BOM:532998) 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, Lotus Eye Hospital & Institute's WACC % is 12.76%. Lotus Eye Hospital & Institute's ROC % is 5.31% (calculated using TTM income statement data). Lotus Eye Hospital & Institute 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.

Lotus Eye Hospital & Institute ROC % Related Terms

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Lotus Eye Hospital & Institute (BOM:532998) Business Description

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GURUFOCUS.COM » STOCK LIST » Healthcare » Healthcare Providers & Services » Lotus Eye Hospital & Institute Ltd (BOM:532998) » Definitions » ROC %

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LOTUSEYE:India

Address

SF No. 770/12, Avinashi Road, Civil Aerodrome Post, Coimbatore, TN, IND, 641 014

Website

https://www.lotuseye.org

Lotus Eye Hospital & Institute Ltd is an India-based eye care hospital. It is engaged in providing treatment and care for eye diseases and disorders. It offers treatment services for eye conditions like refractive error, retina and uvea, cornea, glaucoma, pediatric, orbit and oculoplasty, neuro-ophthalmology, and binocular vision. In addition, the company also operates an eye bank for functioning eye donation activities. The company mainly operates in India and generates revenue by providing medical services, pharmacy sales, and contact lens, and optical, of which the majority of the revenue is derived from providing segmmedical services.

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