Mencast Holdings (SGX:5NF) ROC % : 2.82% (As of Dec. 2023)

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What is Mencast 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 %. Mencast Holdings's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 2.82%.

As of today (2024-05-22), Mencast Holdings's WACC % is 8.89%. Mencast Holdings's ROC % is 2.57% (calculated using TTM income statement data). Mencast Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Mencast Holdings ROC % Historical Data

The historical data trend for Mencast 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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Mencast Holdings ROC % Chart

Mencast Holdings Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-2.39

2.08

3.46

-1.99

2.55

Mencast 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															7.00	-0.58	6.20	3.03	2.82

Mencast Holdings ROC % Calculation

Mencast 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 )
=	4.954 * ( 1 - 8.88% )	/	( (188.362	+	165.651)	/ 2 )
=	4.5140848	/	177.0065
=	2.55 %

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	))
=	201.062	-	3.674	-	( 9.026	-	max(0, 88.821	-	109.769	+	9.026	))
=	188.362

	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	))
=	180.993	-	4.872	-	( 10.47	-	max(0, 86.817	-	99.38	+	10.47	))
=	165.651

Mencast 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 )
=	4.148 * ( 1 - -15.5% )	/	( (173.672	+	165.651)	/ 2 )
=	4.79094	/	169.6615
=	2.82 %

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	))
=	192.226	-	5.549	-	( 13.005	-	max(0, 86.98	-	108.907	+	13.005	))
=	173.672

	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	))
=	180.993	-	4.872	-	( 10.47	-	max(0, 86.817	-	99.38	+	10.47	))
=	165.651

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

Mencast Holdings (SGX:5NF) 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, Mencast Holdings's WACC % is 8.89%. Mencast Holdings's ROC % is 2.57% (calculated using TTM income statement data). Mencast 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.

Mencast Holdings ROC % Related Terms

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Mencast Holdings (SGX:5NF) Business Description

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GURUFOCUS.COM » STOCK LIST » Energy » Oil & Gas » Mencast Holdings Ltd (SGX:5NF) » Definitions » ROC %

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Address

42E Penjuru Road, Mencast Central, Singapore, SGP, 609161

Website

https://www.mencast.com.sg

Mencast Holdings Ltd along with its subsidiaries is a regional Engineering and Maintenance, Repair and Overhaul solutions provider. It consists of three segments namely the Offshore and Engineering Segment which includes engineering, manufacturing, inspection and maintenance, Marine Segment which is engaged in sterngear manufacturing and refurbishment works, repair and maintenance services, ship inspection engineering and fabrication works and Energy Services Segment which includes oil sludge and slop reclamation, hydro cleaning oil and gas tanks, launch carbon footprint management initiatives and green initiatives. The company's maximum revenue is from the Marine Segment Followed by Offshore Engineering. Geographically, it gets a major share of the revenue from Singapore.

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