Shinko Electric Industries Co (TSE:6967) ROC % : 6.84% (As of Mar. 2024)

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What is Shinko Electric Industries 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 %. Shinko Electric Industries Co's annualized return on capital (ROC %) for the quarter that ended in Mar. 2024 was 6.84%.

As of today (2024-05-29), Shinko Electric Industries Co's WACC % is 8.52%. Shinko Electric Industries Co's ROC % is 6.66% (calculated using TTM income statement data). Shinko Electric Industries Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Shinko Electric Industries Co ROC % Historical Data

The historical data trend for Shinko Electric Industries 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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Shinko Electric Industries Co ROC % Chart

Shinko Electric Industries Co Annual Data

Trend

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

Mar23

Mar24

ROC %

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1.86

11.53

29.75

25.15

6.70

Shinko Electric Industries 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															6.91	4.13	8.78	6.73	6.84

Shinko Electric Industries Co ROC % Calculation

Shinko Electric Industries Co's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2024 is calculated as:

	ROC % (A: Mar. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2023 )	+	Invested Capital (A: Mar. 2024 ))	/ count )
=	24811 * ( 1 - 28.19% )	/	( (244283	+	287401)	/ 2 )
=	17816.7791	/	265842
=	6.70 %

where

	Invested Capital		(A: Mar. 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	))
=	386934	-	50121	-	( 116325	-	max(0, 133545	-	226075	+	116325	))
=	244283

	Invested Capital		(A: 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	))
=	393750	-	48836	-	( 82807	-	max(0, 126946	-	184459	+	82807	))
=	287401

Shinko Electric Industries 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 )
=	27256 * ( 1 - 29.11% )	/	( (277735	+	287401)	/ 2 )
=	19321.7784	/	282568
=	6.84 %

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	))
=	378171	-	39124	-	( 74321	-	max(0, 117159	-	178471	+	74321	))
=	277735

	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	))
=	393750	-	48836	-	( 82807	-	max(0, 126946	-	184459	+	82807	))
=	287401

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

Shinko Electric Industries Co (TSE:6967) 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, Shinko Electric Industries Co's WACC % is 8.52%. Shinko Electric Industries Co's ROC % is 6.66% (calculated using TTM income statement data). Shinko Electric Industries 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.

Shinko Electric Industries Co ROC % Related Terms

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Shinko Electric Industries Co (TSE:6967) Business Description

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SKS:Germany

Address

80, Oshimada-machi, Nagano-shi, Nagano, JPN, 381-2287

Website

http://www.shinko.co.jp

Shinko Electric Industries Co Ltd is an integrated manufacturer of semiconductor packages. It houses eight core technologies that include hermetic seal technology, ceramic technology, multilayer build-up technology, integrated circuit assembly technology, and many others. Integrated circuit packages are the leading revenue generator, but hermetic seal tech is the traditional offering from Shinko. It connects glass and ceramics to various metals and is used in areas such as semiconductor lasers, and sensors for in-car use. The company also produces simulation technology that encompasses signal and power integrity of high-speed transmission lines and other solutions needed for high-performance semiconductor packages. Offices are located globally to serve a host of different industries.

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