Melewar Industrial Group Bhd (XKLS:3778) ROC % : -1.95% (As of Dec. 2023)

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What is Melewar Industrial Group Bhd 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 %. Melewar Industrial Group Bhd's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -1.95%.

As of today (2024-05-17), Melewar Industrial Group Bhd's WACC % is 8.65%. Melewar Industrial Group Bhd's ROC % is 0.89% (calculated using TTM income statement data). Melewar Industrial Group Bhd earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Melewar Industrial Group Bhd ROC % Historical Data

The historical data trend for Melewar Industrial Group Bhd'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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Melewar Industrial Group Bhd ROC % Chart

Melewar Industrial Group Bhd Annual Data

Trend

Jun14

Jun15

Jun16

Jun17

Jun18

Jun19

Jun20

Jun21

Jun22

Jun23

ROC %

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6.35

-0.10

11.23

9.40

-1.26

Melewar Industrial Group Bhd Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
ROC %	Get a 7-Day Free Trial															-9.04	-0.20	3.62	0.66	-1.95

Melewar Industrial Group Bhd ROC % Calculation

Melewar Industrial Group Bhd'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 )
=	-8.471 * ( 1 - 8.6% )	/	( (606.149	+	627.299)	/ 2 )
=	-7.742494	/	616.724
=	-1.26 %

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	))
=	888.98	-	165.48	-	( 117.351	-	max(0, 266.172	-	484.881	+	117.351	))
=	606.149

	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	))
=	751.649	-	38.294	-	( 86.056	-	max(0, 141.595	-	338.726	+	86.056	))
=	627.299

Melewar Industrial Group Bhd'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: Sep. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	-13.348 * ( 1 - 6.93% )	/	( (619.761	+	652.017)	/ 2 )
=	-12.4229836	/	635.889
=	-1.95 %

where

	Invested Capital		(Q: Sep. 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	))
=	723.335	-	21.055	-	( 82.519	-	max(0, 113.032	-	313.239	+	82.519	))
=	619.761

	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	))
=	755.538	-	27.245	-	( 76.276	-	max(0, 147.171	-	347.875	+	76.276	))
=	652.017

Note: The Operating Income data used here is four times the quarterly (Dec. 2023) data.

Melewar Industrial Group Bhd (XKLS:3778) 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, Melewar Industrial Group Bhd's WACC % is 8.65%. Melewar Industrial Group Bhd's ROC % is 0.89% (calculated using TTM income statement data). Melewar Industrial Group Bhd 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.

Melewar Industrial Group Bhd ROC % Related Terms

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Melewar Industrial Group Bhd (XKLS:3778) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Basic Materials » Steel » Melewar Industrial Group Bhd (XKLS:3778) » Definitions » ROC %

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Address

Number 566 Jalan Ipoh, 15th Floor, Kuala Lumpur, SGR, MYS, 51200

Website

http://www.melewar-mig.com

Melewar Industrial Group Bhd operates in four segments. The Steel Tube segment is in the business of manufacturing and sales of steel pipes and tubes. The Cold Rolled Coil segment is in the business of manufacturing and sales of cold-rolled coils. The investment holding segment refers to companies with investments in subsidiaries and companies with investments in quoted and unquoted equity securities. Others comprise companies involved in the food, trade-retail business, modular construction, and metal scraps trading businesses. It generates maximum revenue from the Cold rolled coil segment. Geographically, the group operates in Malaysia.

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