Crescent Steel & Allied Products (KAR:CSAP) ROC % : 2.80% (As of Mar. 2024)

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What is Crescent Steel & Allied Products 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 %. Crescent Steel & Allied Products's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 2.80%.

As of today (2024-06-08), Crescent Steel & Allied Products's WACC % is 11.95%. Crescent Steel & Allied Products's ROC % is 8.75% (calculated using TTM income statement data). Crescent Steel & Allied Products earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Crescent Steel & Allied Products ROC % Historical Data

The historical data trend for Crescent Steel & Allied Products'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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Crescent Steel & Allied Products ROC % Chart

Crescent Steel & Allied Products Annual Data

Trend

Jun14

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

ROC %

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-4.76

-0.14

1.71

-4.00

2.95

Crescent Steel & Allied Products Quarterly Data
	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23	Mar24
ROC %	Get a 7-Day Free Trial															8.03	7.17	6.33	18.11	2.80

Crescent Steel & Allied Products ROC % Calculation

Crescent Steel & Allied Products'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 )
=	310.301 * ( 1 - 15.47% )	/	( (7872.41	+	9887.933)	/ 2 )
=	262.2974353	/	8880.1715
=	2.95 %

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	))
=	9468.96	-	809.798	-	( 786.752	-	max(0, 2253.002	-	3221.231	+	786.752	))
=	7872.41

	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	))
=	11302.641	-	544.233	-	( 870.475	-	max(0, 3105.701	-	4101.029	+	870.475	))
=	9887.933

Crescent Steel & Allied Products's annualized Return on Capital (ROC %) for the quarter that ended in Mar. 2024 is calculated as:

	ROC % (Q: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Dec. 2023 )	+	Invested Capital (Q: Mar. 2024 ))	/ count )
=	337.048 * ( 1 - 10.85% )	/	( (9923.087	+	11562.29)	/ 2 )
=	300.478292	/	10742.6885
=	2.80 %

where

	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	))
=	12453.157	-	778.436	-	( 1751.634	-	max(0, 3335.375	-	5776.73	+	1751.634	))
=	9923.087

	Invested Capital		(Q: Mar. 2024 )
=	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	))
=	13055.987	-	407.345	-	( 1086.352	-	max(0, 3836.245	-	6201.49	+	1086.352	))
=	11562.29

Note: The Operating Income data used here is four times the quarterly (Mar. 2024) data.

Crescent Steel & Allied Products (KAR:CSAP) 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, Crescent Steel & Allied Products's WACC % is 11.95%. Crescent Steel & Allied Products's ROC % is 8.75% (calculated using TTM income statement data). Crescent Steel & Allied Products 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.

Crescent Steel & Allied Products ROC % Related Terms

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Crescent Steel & Allied Products (KAR:CSAP) Business Description

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GURUFOCUS.COM » STOCK LIST » Basic Materials » Steel » Crescent Steel & Allied Products Ltd (KAR:CSAP) » Definitions » ROC %

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Address

9th Floor, Sidco Avenue Centre, 264 R.A. Lines, Karachi, SD, PAK, 74200

Website

https://www.crescent.com.pk

Crescent Steel & Allied Products Ltd has diversified businesses. The company's operating segment includes Steel; Cotton; Investment and Infrastructure Development (IID), Energy and Hadeed(Steel Billet) Divison. The steel segment comprises of manufacturing and coating of steel pipes which generates maximum revenue. Geographically, it derives a majority of revenue from Pakistan.

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