Capri Holdings (NYSE:CPRI) ROC %

: 15.14% (As of Dec. 2022)

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ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Capri Holdings's annualized return on capital (ROC %) for the quarter that ended in Dec. 2022 was 15.14%.

As of today (2023-05-31), Capri Holdings's WACC % is 12.82%. Capri Holdings's ROC % is 12.67% (calculated using TTM income statement data). Capri Holdings earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Capri Holdings ROC % Historical Data

The historical data trend for Capri Holdings'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.

Capri Holdings Annual Data

Trend

Mar13

Mar14

Mar15

Mar16

Mar17

Mar18

Mar19

Mar20

Mar21

Mar22

ROC %

27.74

16.96

9.30

-114.53

14.04

Capri Holdings Quarterly Data
	Mar18	Jun18	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22
ROC %																20.40	7.55	12.88	14.52	15.14

Capri Holdings ROC % Calculation

Capri Holdings's annualized Return on Capital (ROC %) for the fiscal year that ended in Mar. 2022 is calculated as:

	ROC % (A: Mar. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Mar. 2021 )	+	Invested Capital (A: Mar. 2022 ))	/ count )
=	1018 * ( 1 - 10.05% )	/	( (6678	+	6364)	/ 2 )
=	915.691	/	6521
=	14.04 %

where

	Invested Capital		(A: Mar. 2021 )
=	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	))
=	7481	-	878	-	( 232	-	max(0, 1621	-	1546	+	232	))
=	6678

	Invested Capital		(A: Mar. 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	))
=	7480	-	947	-	( 169	-	max(0, 1566	-	1891	+	169	))
=	6364

Capri Holdings's annualized Return on Capital (ROC %) for the quarter that ended in Dec. 2022 is calculated as:

	ROC % (Q: Dec. 2022 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Sep. 2022 )	+	Invested Capital (Q: Dec. 2022 ))	/ count )
=	968 * ( 1 - 1.32% )	/	( (6269	+	6347)	/ 2 )
=	955.2224	/	6308
=	15.14 %

where

	Invested Capital		(Q: Sep. 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	))
=	7202	-	718	-	( 215	-	max(0, 1278	-	2085	+	215	))
=	6269

	Invested Capital		(Q: 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	))
=	7554	-	926	-	( 281	-	max(0, 1559	-	2084	+	281	))
=	6347

Note: The Operating Income data used here is four times the quarterly (Dec. 2022) data.

Capri Holdings (NYSE:CPRI) 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, Capri Holdings's WACC % is 12.82%. Capri Holdings's ROC % is 12.67% (calculated using TTM income statement data). Capri Holdings 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.

Capri Holdings ROC % Related Terms

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Capri Holdings (NYSE:CPRI) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Cyclical » Retail - Cyclical » Capri Holdings Ltd (NYSE:CPRI) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

MKO:Germany CAPH34:Brazil

Address

33 Kingsway, London, GBR, WC2B 6UF

Website

http://www.capriholdings.com

Michael Kors, Versace, and Jimmy Choo are the brands of Capri Holdings, a marketer, distributor, and retailer of upscale accessories and apparel. Kors, Capri's largest brand, offers handbags, footwear, and apparel through more than 800 company-owned stores, wholesale, and e-commerce. Versace (acquired in 2018) is known for its ready-to-wear luxury fashion, while Jimmy Choo (acquired in 2017) is best known for women's luxury footwear. John Idol has served as CEO since 2003.

Executives

Joshua Schulman	officer: CEO - Michael Kors	603 WEST 50TH STREET, NEW YORK X1 10019
Jenna Hendricks	officer: SVP, Chief People Officer	33 KINGSWAY, LONDON X0 WC2B 6UF
Marilyn C Crouther	director	9300 LEE HIGHWAY, FAIRFAX VA 22031
Daniel Purefoy	officer: SVP, Global Ops	33 KINGSWAY, LONDON X0 WC2B 6UF
Ann Mclaughlin Korologos	director	PO BOX 3599, BATTLECREEK MI 49016-3599
Freestone Robin Anthony David	director	33 KINGSWAY, LONDON X0 WC2B 6UF
Jean Tomlin	director	C/O MICHAEL KORS (USA), INC., 11 WEST 42ND STREET, NEW YORK NY 10036
Thomas Jr. Edwards	officer: EVP, CFO, COO & Treasurer	6820 LBJ FREEWAY, DALLAS TX 75240
Krista A Mcdonough	officer: SVP, General Counsel	33 KINGSWAY, LONDON X0 WC2B 6UF
Cathy Marie Robinson	officer: SVP, Corp Str & Ch Ops Off	C/O MICHAEL KORS (USA), INC., 11 WEST 42ND STREET, NEW YORK NY 10036
Michael David Kors	director, officer: Hon Chair & Chief Creative Off	C/O MICHAEL KORS (USA), INC., 11 WEST 42ND STREET, ATTN. LEE SPORN, NEW YORK NY 10036
Jane A. Thompson	director	C/O MICHAEL KORS (USA), INC., 11 WEST 42ND STREET, NEW YORK NY 10036
Stephen F Reitman	director	11 WEST 42ND STREET, 21ST FLOOR, NEW YORK NY 10036
M William Benedetto	director	11 WEST 42ND STREET, 21ST FLOOR, NEW YORK NY 10036
John D Idol	director, officer: Chairman & CEO	650 MADISON AVE, NEW YORK NY 10022