Lex Nimble Solutions (BOM:541196) ROC % : 1.48% (As of Sep. 2023)

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What is Lex Nimble Solutions 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 %. Lex Nimble Solutions's annualized return on capital (ROC %) for the quarter that ended in Sep. 2023 was 1.48%.

As of today (2024-05-24), Lex Nimble Solutions's WACC % is 7.09%. Lex Nimble Solutions's ROC % is 3.07% (calculated using TTM income statement data). Lex Nimble Solutions earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Lex Nimble Solutions ROC % Historical Data

The historical data trend for Lex Nimble Solutions'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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Lex Nimble Solutions ROC % Chart

Lex Nimble Solutions Annual Data

Trend

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

ROC %

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-2.63

2.71

0.20

-0.06

1.89

Lex Nimble Solutions Semi-Annual Data
	Mar13	Mar14	Mar15	Mar16	Mar17	Sep17	Mar18	Sep18	Mar19	Sep19	Mar20	Sep20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
ROC %	Get a 7-Day Free Trial													-0.46	0.32	0.60	3.46	1.48

Lex Nimble Solutions ROC % Calculation

Lex Nimble Solutions'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 )
=	3.581 * ( 1 - 24.5% )	/	( (139.758	+	145.75)	/ 2 )
=	2.703655	/	142.754
=	1.89 %

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	))
=	143.489	-	1.584	-	( 2.147	-	max(0, 4.101	-	19.057	+	2.147	))
=	139.758

	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	))
=	151.924	-	2.851	-	( 3.323	-	max(0, 4.168	-	14.457	+	3.323	))
=	145.75

Lex Nimble Solutions's annualized Return on Capital (ROC %) for the quarter that ended in Sep. 2023 is calculated as:

	ROC % (Q: Sep. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Mar. 2023 )	+	Invested Capital (Q: Sep. 2023 ))	/ count )
=	1.582 * ( 1 - 26.64% )	/	( (145.75	+	11.104)	/ 2 )
=	1.1605552	/	78.427
=	1.48 %

where

	Invested Capital		(Q: 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	))
=	151.924	-	2.851	-	( 3.323	-	max(0, 4.168	-	14.457	+	3.323	))
=	145.75

	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	))
=	156.052	-	3.1	-	( 141.848	-	max(0, 3.889	-	149.489	+	141.848	))
=	11.104

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

Lex Nimble Solutions (BOM:541196) 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, Lex Nimble Solutions's WACC % is 7.09%. Lex Nimble Solutions's ROC % is 3.07% (calculated using TTM income statement data). Lex Nimble Solutions 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.

Lex Nimble Solutions ROC % Related Terms

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Lex Nimble Solutions (BOM:541196) Business Description

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GURUFOCUS.COM » STOCK LIST » Technology » Software » Lex Nimble Solutions Ltd (BOM:541196) » Definitions » ROC %

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Address

Quardant 3, Module A1, Cyber Towers, 10th Floor, Hitech City, Madhapur, Hyderabad, TG, IND, 500 081

Website

https://www.lexnimble.in

Lex Nimble Solutions Ltd is engaged in IT consulting, support and solutions and appraisal advisory, certification, training and related services on quality models. The company's business segments are Software services and Consulting services. It derives key revenue from the Consulting services segment which covers IT staffing, Support Services and Payroll and accounting Service; and Quality Certification, Consulting and Training. Geographically, the group has customers located within India and other countries.

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