Response Plus Holding (ADX:RPM) ROC % : 22.90% (As of Dec. 2023)

View and export this data going back to 2021. Start your Free Trial

What is Response Plus Holding 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 %. Response Plus Holding's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was 22.90%.

As of today (2024-04-29), Response Plus Holding's WACC % is 10.75%. Response Plus Holding's ROC % is 27.60% (calculated using TTM income statement data). Response Plus Holding generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

Response Plus Holding ROC % Historical Data

The historical data trend for Response Plus Holding'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.

* Premium members only.

Response Plus Holding ROC % Chart

Response Plus Holding Annual Data

Trend

Dec20

Dec21

Dec22

Dec23

ROC %

-303.22

66.87

17.73

28.96

Response Plus Holding Semi-Annual Data
	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial			54.92	22.67	12.03	31.74	22.90

Response Plus Holding ROC % Calculation

Response Plus Holding'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 )
=	50.042 * ( 1 - 1.15% )	/	( (140.906	+	200.754)	/ 2 )
=	49.466517	/	170.83
=	28.96 %

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	))
=	314.329	-	77.125	-	( 96.298	-	max(0, 79.929	-	253.644	+	96.298	))
=	140.906

	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	))
=	298.185	-	50.736	-	( 46.695	-	max(0, 54.293	-	244.168	+	46.695	))
=	200.754

Response Plus Holding'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: Jun. 2023 )	+	Invested Capital (Q: Dec. 2023 ))	/ count )
=	46.474 * ( 1 - 2.21% )	/	( (196.08	+	200.754)	/ 2 )
=	45.4469246	/	198.417
=	22.90 %

where

	Invested Capital		(Q: 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	))
=	271.204	-	33.847	-	( 41.277	-	max(0, 37.1	-	237.728	+	41.277	))
=	196.08

	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	))
=	298.185	-	50.736	-	( 46.695	-	max(0, 54.293	-	244.168	+	46.695	))
=	200.754

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

Response Plus Holding (ADX:RPM) 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, Response Plus Holding's WACC % is 10.75%. Response Plus Holding's ROC % is 27.60% (calculated using TTM income statement data). Response Plus Holding generates higher returns on investment than it costs the company to raise the capital needed for that investment. It 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.

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.

Response Plus Holding ROC % Related Terms

Thank you for viewing the detailed overview of Response Plus Holding's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.

Response Plus Holding (ADX:RPM) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Energy » Oil & Gas » Response Plus Holding (ADX:RPM) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

N/A

Address

Burjeel Medical City, MBZ City, P.O. Box 130336, Zone D, 3rd Floor, Abu Dhabi, ARE

Website

https://rpm.ae

Response Plus Holding is engaged in the supply of manpower and medical equipment and the management of hospitals, clinics, and medical centers. The company's business activities are; healthcare services, investment in the healthcare-related business, investing in real estate and movables necessary for carrying out its activities, and management of affiliated companies. Geographically, it operates in the following markets; United Arab Emirates, Kingdom of Saudi Arabia, and Sultanate of Oman. Out of which a majority of its revenue comes from the United Arab Emirates market.