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LHN Logistics (SGX:GIH) ROIC % : 12.59% (As of Mar. 2023)


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What is LHN Logistics ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. LHN Logistics's annualized return on invested capital (ROIC %) for the quarter that ended in Mar. 2023 was 12.59%.

As of today (2024-05-16), LHN Logistics's WACC % is 7.09%. LHN Logistics's ROIC % is 6.42% (calculated using TTM income statement data). LHN Logistics earns returns that do not match up to its cost of capital. It will destroy value as it grows.


LHN Logistics ROIC % Historical Data

The historical data trend for LHN Logistics's ROIC % 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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LHN Logistics ROIC % Chart

LHN Logistics Annual Data
Trend Sep19 Sep20 Sep21 Sep22
ROIC %
26.40 14.95 12.24 6.49

LHN Logistics Semi-Annual Data
Sep19 Sep20 Sep21 Mar22 Sep22 Mar23
ROIC % Get a 7-Day Free Trial - - 5.52 3.05 12.59

Competitive Comparison of LHN Logistics's ROIC %

For the Integrated Freight & Logistics subindustry, LHN Logistics's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


LHN Logistics's ROIC % Distribution in the Transportation Industry

For the Transportation industry and Industrials sector, LHN Logistics's ROIC % distribution charts can be found below:

* The bar in red indicates where LHN Logistics's ROIC % falls into.



LHN Logistics ROIC % Calculation

LHN Logistics's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Sep. 2022 is calculated as:

ROIC % (A: Sep. 2022 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Sep. 2021 ) + Invested Capital (A: Sep. 2022 ))/ count )
=1.629 * ( 1 - -19.42% )/( (32.108 + 27.843)/ 2 )
=1.9453518/29.9755
=6.49 %

where

LHN Logistics's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Mar. 2023 is calculated as:

ROIC % (Q: Mar. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Sep. 2022 ) + Invested Capital (Q: Mar. 2023 ))/ count )
=3.476 * ( 1 - -11.27% )/( (27.843 + 33.596)/ 2 )
=3.8677452/30.7195
=12.59 %

where

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

* 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.


LHN Logistics  (SGX:GIH) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. 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 ROIC % 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, LHN Logistics's WACC % is 7.09%. LHN Logistics's ROIC % is 6.42% (calculated using TTM income statement data).


Be Aware

Like ROE % and ROA %, ROIC % 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.


LHN Logistics ROIC % Related Terms

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LHN Logistics (SGX:GIH) Business Description

Traded in Other Exchanges
N/A
Address
10 Raeburn Park No. 02-15B, Singapore, SGP, 088702
LHN Logistics Ltd is a logistics services group with two principal business segments, namely, transportation and container depot services. Geographically it derives a majority of its revenue from Singapore.

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