Wuling Motors Holdings (HKSE:00305) ROC % : 2.73% (As of Dec. 2023)

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What is Wuling Motors Holdings 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 %. Wuling Motors Holdings's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 2.73%.

As of today (2024-06-14), Wuling Motors Holdings's WACC % is 7.28%. Wuling Motors Holdings's ROC % is 1.53% (calculated using TTM income statement data). Wuling Motors Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Wuling Motors Holdings ROC % Historical Data

The historical data trend for Wuling Motors Holdings'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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Wuling Motors Holdings ROC % Chart

Wuling Motors Holdings Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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1.47

1.32

-0.61

0.12

1.49

Wuling Motors Holdings 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															0.01	-2.75	2.82	0.41	2.73

Wuling Motors Holdings ROC % Calculation

Wuling Motors Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Dec. 2023 is calculated as:

	ROC % (A: Dec. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Dec. 2022 )	+	Invested Capital (A: Dec. 2023 ))	/ count )
=	180.546 * ( 1 - 10.33% )	/	( (11186.57	+	10525.748)	/ 2 )
=	161.8955982	/	10856.159
=	1.49 %

where

	Invested Capital		(A: Dec. 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	))
=	17359.795	-	7214.764	-	( 2220.339	-	max(0, 13145.326	-	12103.787	+	2220.339	))
=	11186.57

	Invested Capital		(A: 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	))
=	16462.219	-	6458.281	-	( 2862.195	-	max(0, 12059.633	-	11537.823	+	2862.195	))
=	10525.748

Wuling Motors Holdings'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 )
=	312.616 * ( 1 - 10.27% )	/	( (10048.894	+	10525.748)	/ 2 )
=	280.5103368	/	10287.321
=	2.73 %

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	))
=	17250.674	-	7233.587	-	( 2833.48	-	max(0, 12257.455	-	12225.648	+	2833.48	))
=	10048.894

	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	))
=	16462.219	-	6458.281	-	( 2862.195	-	max(0, 12059.633	-	11537.823	+	2862.195	))
=	10525.748

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

Wuling Motors Holdings (HKSE:00305) 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, Wuling Motors Holdings's WACC % is 7.28%. Wuling Motors Holdings's ROC % is 1.53% (calculated using TTM income statement data). Wuling Motors Holdings 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.

Wuling Motors Holdings ROC % Related Terms

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Wuling Motors Holdings (HKSE:00305) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Vehicles & Parts » Wuling Motors Holdings Ltd (HKSE:00305) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

WLMTF:USA 6LY:Germany

Address

168–200 Connaught Road, Shun Tak Centre, Unit 3406, 34th Floor, West Tower, Central, Hong Kong, HKG

Website

https://www.wuling.com.hk

Wuling Motors Holdings Ltd is an investment holding company. Its principal activities are the manufacturing and sale of engines, engine-related parts, other power supply products, automotive components and accessories, steel and specialized vehicles (including new energy vehicles), as well as the provision of water and power supply to customers. The segments of the group are Vehicles' power supply systems; Automotive components and other industrial services, which is the key revenue-generating segment; Commercial vehicle assembly; and Others. The group derives a majority of its revenue from Mainland China.

Executives

Dragon Hill Development Limited	2101 Beneficial owner
Kwan To Yin	2101 Beneficial owner
Lee Shing	2201 Interest of corporation controlled by you
Wu Ling Xiang Gang Kong Gu You Xian Gong Si	2101 Beneficial owner
Wu Ling Qi Che Xiang Gang You Xian Gong Si	2201 Interest of corporation controlled by you
Guang Xi Qi Che Ji Tuan You Xian Gong Si	2201 Interest of corporation controlled by you

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