Arka Bhd (XKLS:7218) ROC % : -16.16% (As of Dec. 2023)

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What is Arka 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 %. Arka Bhd's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -16.16%.

As of today (2024-06-05), Arka Bhd's WACC % is 8.54%. Arka Bhd's ROC % is -4.54% (calculated using TTM income statement data). Arka Bhd earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Arka Bhd ROC % Historical Data

The historical data trend for Arka 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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Arka Bhd ROC % Chart

Arka Bhd Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

ROC %

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-13.24

-7.42

0.31

0.67

-5.78

Arka 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															-3.66	-0.48	-3.05	3.23	-16.16

Arka Bhd ROC % Calculation

Arka Bhd'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 )
=	-3.616 * ( 1 - -17.02% )	/	( (61.422	+	85.018)	/ 2 )
=	-4.2314432	/	73.22
=	-5.78 %

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	))
=	70.592	-	4.729	-	( 4.441	-	max(0, 6.923	-	14.654	+	4.441	))
=	61.422

	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	))
=	96.24	-	9.568	-	( 1.654	-	max(0, 18.142	-	46.235	+	1.654	))
=	85.018

Arka 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 )
=	-10.224 * ( 1 - -17.22% )	/	( (63.271	+	85.018)	/ 2 )
=	-11.9845728	/	74.1445
=	-16.16 %

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	))
=	73.836	-	9.649	-	( 0.916	-	max(0, 9.932	-	17.36	+	0.916	))
=	63.271

	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	))
=	96.24	-	9.568	-	( 1.654	-	max(0, 18.142	-	46.235	+	1.654	))
=	85.018

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

Arka Bhd (XKLS:7218) 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, Arka Bhd's WACC % is 8.54%. Arka Bhd's ROC % is -4.54% (calculated using TTM income statement data). Arka 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.

Arka Bhd ROC % Related Terms

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Arka Bhd (XKLS:7218) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Transportation » Arka Bhd (XKLS:7218) » Definitions » ROC %

Comparable Companies

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N/A

Address

Lot 2955, 2956 & 2957, Jalan Perusahaan Sungai Lokan 3, Kawasan Perusahaan Sungai Lokan, Butterworth, PNG, MYS, 13400

Website

https://www.transocean.com.my

TransOcean Holdings Bhd is a provider of logistics and logistics related activities. The company provides trucking services and cross-border trucking services for consolidation cargo or loose truck loads services from the Malaysia-Singapore-Malaysia and Malaysia-Thailand-Malaysia routes. Its segments consist of Logistic solution that provide customs brokerage, warehousing, freight forwarding trucking related services, international air and ocean freight services; Tyre products that manufactures and trades in tyres; and Investment holdings that provides management services and letting of properties. Majority of the revenue is derived from the provision of custom brokerage, warehousing, freight forwarding trucking related services, international air and ocean freight services.

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