Ashley (Laura) Holdings (LSE:ALY) ROC % : -7.41% (As of Dec. 2019)

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What is Ashley (Laura) 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 %. Ashley (Laura) Holdings's annualized return on capital (ROC %) for the quarter that ended in Dec. 2019 was -7.41%.

As of today (2024-05-22), Ashley (Laura) Holdings's WACC % is -14.04%. Ashley (Laura) Holdings's ROC % is -18.54% (calculated using TTM income statement data). Ashley (Laura) Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Ashley (Laura) Holdings ROC % Historical Data

The historical data trend for Ashley (Laura) 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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Ashley (Laura) Holdings ROC % Chart

Ashley (Laura) Holdings Annual Data

Trend

Jan09

Jan10

Jan11

Jan12

Jan13

Jan14

Jan15

Jun17

Jun18

Jun19

ROC %

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24.44

32.01

8.68

-87.46

-12.13

Ashley (Laura) Holdings Semi-Annual Data
	Jul09	Jan10	Jul10	Jan11	Jul11	Jan12	Jul12	Jan13	Jul13	Jan14	Jul14	Jan15	Jul15	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19
ROC %	Get a 7-Day Free Trial															8.10	4.04	1.37	-38.75	-7.41

Ashley (Laura) Holdings ROC % Calculation

Ashley (Laura) Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2019 is calculated as:

	ROC % (A: Jun. 2019 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jun. 2018 )	+	Invested Capital (A: Jun. 2019 ))	/ count )
=	-9.5 * ( 1 - 2.1% )	/	( (99.2	+	54.2)	/ 2 )
=	-9.3005	/	76.7
=	-12.13 %

where

	Invested Capital		(A: Jun. 2018 )
=	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	))
=	124.6	-	25.4	-	( 0	-	max(0, 57.5	-	73	+	0	))
=	99.2

	Invested Capital		(A: Jun. 2019 )
=	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	))
=	74	-	19	-	( 0.8	-	max(0, 38.1	-	62.5	+	0.8	))
=	54.2

Ashley (Laura) Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2019 is calculated as:

	ROC % (Q: Dec. 2019 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jun. 2019 )	+	Invested Capital (Q: Dec. 2019 ))	/ count )
=	-5.8 * ( 1 - 0% )	/	( (54.2	+	102.4)	/ 2 )
=	-5.8	/	78.3
=	-7.41 %

where

	Invested Capital		(Q: Jun. 2019 )
=	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	))
=	74	-	19	-	( 0.8	-	max(0, 38.1	-	62.5	+	0.8	))
=	54.2

	Invested Capital		(Q: Dec. 2019 )
=	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	))
=	137.5	-	31.1	-	( 4.1	-	max(0, 54.4	-	58.4	+	4.1	))
=	102.4

Note: The Operating Income data used here is two times the semi-annual (Dec. 2019) data.

Ashley (Laura) Holdings (LSE:ALY) 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, Ashley (Laura) Holdings's WACC % is -14.04%. Ashley (Laura) Holdings's ROC % is -18.54% (calculated using TTM income statement data). Ashley (Laura) 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.

Ashley (Laura) Holdings ROC % Related Terms

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Ashley (Laura) Holdings (LSE:ALY) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Ashley (Laura) Holdings PLC (LSE:ALY) » Definitions » ROC %

Traded in Other Exchanges

N/A

Address

27 Bagleys Lane, Fulham, London, GBR, SW6 2QA

Website

http://www.lauraashley.com

Ashley (Laura) Holdings PLC is an international lifestyle brand, which specializes in retailing furniture, home accessories, decorating and fashion products. Its two operating segments are Retail and Non-Retail. Retail revenue reflects sales through its Stores; E-Commerce and Mail Order and Hotel. Its Non-retail revenue includes Licensing, Franchising, and Manufacturing. The company generates maximum revenue from the Retail segment which includes Stores. Geographically, it derives a majority of revenue from the UK, Ireland and France and also has a presence in Japan and the Rest of the World.

Ashley (Laura) Holdings (LSE:ALY) Headlines

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