Jiangsu Baichuan High-Tech New Materials Co (SZSE:002455) ROC % : 3.54% (As of Mar. 2024)

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What is Jiangsu Baichuan High-Tech New Materials Co 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 %. Jiangsu Baichuan High-Tech New Materials Co's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 3.54%.

As of today (2024-05-29), Jiangsu Baichuan High-Tech New Materials Co's WACC % is 5.88%. Jiangsu Baichuan High-Tech New Materials Co's ROC % is -0.23% (calculated using TTM income statement data). Jiangsu Baichuan High-Tech New Materials Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Jiangsu Baichuan High-Tech New Materials Co ROC % Historical Data

The historical data trend for Jiangsu Baichuan High-Tech New Materials Co'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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Jiangsu Baichuan High-Tech New Materials Co ROC % Chart

Jiangsu Baichuan High-Tech New Materials Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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4.24

1.47

5.24

2.74

-1.08

Jiangsu Baichuan High-Tech New Materials Co 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															-1.41	0.18	0.08	-3.41	3.54

Jiangsu Baichuan High-Tech New Materials Co ROC % Calculation

Jiangsu Baichuan High-Tech New Materials Co'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 )
=	-138.659 * ( 1 - 12.71% )	/	( (9862.138	+	12535.014)	/ 2 )
=	-121.0354411	/	11198.576
=	-1.08 %

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	))
=	10069.93	-	1662.161	-	( 1020.706	-	max(0, 4480.638	-	3026.269	+	1020.706	))
=	9862.138

	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	))
=	11441.149	-	2260.276	-	( 756.744	-	max(0, 5846.381	-	2492.24	+	756.744	))
=	12535.014

Jiangsu Baichuan High-Tech New Materials Co'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 )
=	257.044 * ( 1 - -78.47% )	/	( (12535.014	+	13396.754)	/ 2 )
=	458.7464268	/	12965.884
=	3.54 %

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	))
=	11441.149	-	2260.276	-	( 756.744	-	max(0, 5846.381	-	2492.24	+	756.744	))
=	12535.014

	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	))
=	12296.223	-	2287.002	-	( 1391.403	-	max(0, 6676.19	-	3288.657	+	1391.403	))
=	13396.754

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

Jiangsu Baichuan High-Tech New Materials Co (SZSE:002455) 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, Jiangsu Baichuan High-Tech New Materials Co's WACC % is 5.88%. Jiangsu Baichuan High-Tech New Materials Co's ROC % is -0.23% (calculated using TTM income statement data). Jiangsu Baichuan High-Tech New Materials Co 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.

Jiangsu Baichuan High-Tech New Materials Co ROC % Related Terms

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Jiangsu Baichuan High-Tech New Materials Co (SZSE:002455) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Chemicals » Jiangsu Baichuan High-Tech New Materials Co Ltd (SZSE:002455) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

55 Jianshe Lu, Yunting Town, Jiangsu Province, Jiangyin, CHN, 214422

Website

http://www.bcchem.com

Jiangsu Baichuan High-Tech New Materials Co Ltd is engaged in hi-tech fine chemical products. It is engaged in research, development, and production of many environment-friendly chemical products, such as acetates, propylene glycol ether and its esters, acid anhydrides, plasticizer, polyatomic alcohols, insulating resins and enamel wire paints. The company's products are widely used in many fields, such as paintings, cementing compounds, pharmaceutical and medical treatment, household appliances, carpentry furniture, finishing and decoration, toys for children, package printing, industrial equipment, and road marking.

Executives

Sun Bai Ya	Executives
Jiang Guo Qiang	Directors, executives
Cao Sheng Ping	Executives
Cao Cai E	Executives
Weng Jun Wei	Supervisors
Chen Hui Min	Directors, executives
Zheng Tie Jiang	Director
Zheng Jiang	Directors, executives
Hui Ning	Director
Cheng Guo Liang	Supervisors
Xu Wei	Supervisors

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