Corporate Travel Management (ASX:CTD) ROC % : 7.43% (As of Dec. 2023)

Corporate Travel Management ROC % Chart

Corporate Travel Management Annual Data
	Trend	Jun14	Jun15	Jun16	Jun17	Jun18	Jun19	Jun20	Jun21	Jun22	Jun23
ROC %		Get a 7-Day Free Trial					16.59	-2.09	-9.75	-0.48	6.51

Corporate Travel Management Semi-Annual Data
	Jun14	Dec14	Jun15	Dec15	Jun16	Dec16	Jun17	Dec17	Jun18	Dec18	Jun19	Dec19	Jun20	Dec20	Jun21	Dec21	Jun22	Dec22	Jun23	Dec23
ROC %	Get a 7-Day Free Trial															-4.35	2.18	1.85	11.16	7.43

Corporate Travel Management ROC % Calculation

Corporate Travel Management's annualized Return on Capital (ROC %) for the fiscal year that ended in Jun. 2023 is calculated as:

where

Corporate Travel Management's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2023 is calculated as:

where

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

Corporate Travel Management  (ASX:CTD) 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, Corporate Travel Management's WACC % is 12.66%. Corporate Travel Management's ROC % is 9.30% (calculated using TTM income statement data). Corporate Travel Management 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.

Corporate Travel Management ROC % Related Terms

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Corporate Travel Management (ASX:CTD) Business Description