Ekennis Software Service (BOM:543475) ROC % : 11.42% (As of Sep. 2023)

View and export this data going back to 2022. Start your Free Trial

What is Ekennis Software Service 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 %. Ekennis Software Service's annualized return on capital (ROC %) for the quarter that ended in Sep. 2023 was 11.42%.

As of today (2024-05-25), Ekennis Software Service's WACC % is 13.11%. Ekennis Software Service's ROC % is 4.53% (calculated using TTM income statement data). Ekennis Software Service earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Ekennis Software Service ROC % Historical Data

The historical data trend for Ekennis Software Service'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.

* Premium members only.

Ekennis Software Service ROC % Chart

Ekennis Software Service Annual Data

Trend

Mar20

Mar21

Mar22

Mar23

ROC %

34.42

129.78

79.70

27.61

Ekennis Software Service Semi-Annual Data
	Mar20	Mar21	Sep21	Mar22	Sep22	Mar23	Sep23
ROC %	Get a 7-Day Free Trial			45.15	94.23	55.72	-0.10	11.42

Ekennis Software Service ROC % Calculation

Ekennis Software Service'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 )
=	9.899 * ( 1 - 30.4% )	/	( (18.842	+	31.06)	/ 2 )
=	6.889704	/	24.951
=	27.61 %

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	))
=	55.592	-	4.181	-	( 32.569	-	max(0, 10.456	-	44.944	+	32.569	))
=	18.842

	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	))
=	61.24	-	3.338	-	( 26.842	-	max(0, 8.457	-	40.743	+	26.842	))
=	31.06

Ekennis Software Service'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 )
=	7.106 * ( 1 - 49.69% )	/	( (31.06	+	31.53)	/ 2 )
=	3.5750286	/	31.295
=	11.42 %

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	))
=	61.24	-	3.338	-	( 26.842	-	max(0, 8.457	-	40.743	+	26.842	))
=	31.06

	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	))
=	60.531	-	1.453	-	( 27.548	-	max(0, 5.851	-	41.562	+	27.548	))
=	31.53

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

Ekennis Software Service (BOM:543475) 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, Ekennis Software Service's WACC % is 13.11%. Ekennis Software Service's ROC % is 4.53% (calculated using TTM income statement data). Ekennis Software Service 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.

Ekennis Software Service ROC % Related Terms

Thank you for viewing the detailed overview of Ekennis Software Service's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.

Ekennis Software Service (BOM:543475) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Ekennis Software Service Ltd (BOM:543475) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

No. 1&2 Second Floor, Neeladri Circle, Electronic City Phase-1, Dodathogur Village, Bangalore, KA, IND, 560100

Website

https://www.ekennis.com

Ekennis Software Service Ltd operates in the Information technology and Printing Industry. It is in the business of Software IT Solution and Consulting Services, IT Product / Software Development and Software Training, Enterprise Resource Planning solutions, Learning Management solutions, 3D Printing, Digital Printing and Packaging Design Management consultancy. The company generates majority of its revenue from Manpower Supply Services.

Ekennis Software Service (BOM:543475) Headlines

No Headlines