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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 %. Smart Powerr's annualized return on capital (ROC %) for the quarter that ended in Dec. 2023 was -0.82%.
As of today (2024-04-29), Smart Powerr's WACC % is 4.70%. Smart Powerr's ROC % is -0.99% (calculated using TTM income statement data). Smart Powerr earns returns that do not match up to its cost of capital. It will destroy value as it grows.
The historical data trend for Smart Powerr'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.
Smart Powerr Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
ROC % | Get a 7-Day Free Trial | -1.01 | -0.28 | -2.30 | -9.06 | -1.26 |
Smart Powerr 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 | -25.26 | -0.48 | -1.50 | -0.78 | -0.82 |
Smart Powerr'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 ) |
= | -0.798 * ( 1 - -14.92% ) | / | ( (16.821 | + | 128.659) | / 2 ) |
= | -0.9170616 | / | 72.74 | |||
= | -1.26 % |
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 | )) |
= | 139.136 | - | 7.568 | - | ( 138.814 | - | max(0, 24.384 | - | 139.131 | + | 138.814 | )) |
= | 16.821 |
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 | )) |
= | 136.47 | - | 7.779 | - | ( 0.032 | - | max(0, 23.873 | - | 136.466 | + | 0.032 | )) |
= | 128.659 |
Smart Powerr'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 ) |
= | -0.768 * ( 1 - 0% ) | / | ( (59.544 | + | 128.659) | / 2 ) |
= | -0.768 | / | 94.1015 | |||
= | -0.82 % |
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 | )) |
= | 134.727 | - | 7.232 | - | ( 67.951 | - | max(0, 23.266 | - | 134.722 | + | 67.951 | )) |
= | 59.544 |
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 | )) |
= | 136.47 | - | 7.779 | - | ( 0.032 | - | max(0, 23.873 | - | 136.466 | + | 0.032 | )) |
= | 128.659 |
Note: The Operating Income data used here is four times the quarterly (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.
Smart Powerr (NAS:CREG) 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, Smart Powerr's WACC % is 4.70%. Smart Powerr's ROC % is -0.99% (calculated using TTM income statement data). Smart Powerr 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.
Thank you for viewing the detailed overview of Smart Powerr's ROC % provided by GuruFocus.com. Please click on the following links to see related term pages.
Zhongli Liu | director | 4F, TOWER C RONG CHENG YUN GU BUILDING, KEJI 3RD RD, YANTA DISTRICT, XI-AN CITY, SHAAN XI PROXINCE F4 710075 |
Guohua Ku | director, 10 percent owner, officer: President/Chairman/CTO | SHAANXI BLOWER GROUP, DAI WANG BAN, LINTONG DISTRICT, XI'AN, SHAANXI PROVINCE F4 710600 |
Xiaoping Guo | director | 12/F,TOWER A,CHANG AN INTERNATIONAL BLDG, NO. 88 NAN GUAN ZHENG JI, XI AN CITY F4 0000000 |
Binfeng Gu | officer: Chief Financial Officer | 12/F,TOWER A,CHAN AN INTERNATIONAL BLDG, NO. 88 NAN GUAN ZHENG JIE, XI AN CITY, SHAAN XI PROVINCE F4 0000000000 |
Lulu Sun | director | 12/F,TOWER A,CHANG AN INTERNATIONAL BLDG, NO. 88 NAN GUAN ZHENG JI, XI AN CITY F4 0000000 |
Yongjiang Shi | officer: CFO & Secretary & VP-Finance | 12F TOWER A CHANG AN INTL BLDG, NO 88 NAN GUAN ZHENG XIE, XI AN CITY SHAN XI PROVINCE F4 710068 |
Cangsang Huang | director | 6 YOUYI DONG LU,, HAN YUAN 4 LOU, XI'AN, SHAANXI PROVINCE F4 710054 |
Xiaoshan He | officer: Vice President | 12F TOWER A CHANG AN INTL BLDG, NO 88 NAN GUAN ZHENG XIE, XI AN CITY SHAN XI PROVINCE F4 710068 |
Bohan Zhang | officer: Vice President-Accounting | 12F TOWER A CHANG AN INTL BLDG, NO 88 NAN GUAN ZHENG XIE, XI AN CITY SHAN XI PROVINCE F4 710068 |
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Carlyle Group Inc. | 10 percent owner | C/O THE CARLYLE GROUP, 1001 PENNSYLVANIA AVENUE, N.W., WASHINGTON DC 20004 |
Carlyle Group Management L.l.c. | 10 percent owner | C/O THE CARLYLE GROUP L.P., 1001 PENNSYLVANIA AVENUE, NW, WASHINGTON DC 20004-2505 |
Tc Group Cayman Investment Holdings Sub L.p. | 10 percent owner | C/O WALKER CORPORATE SERVICES LIMITED, 190 ELGIN AVENUE, GEORGE TOWN, GRAND CAYMAN E9 KY1-9001 |
Carlyle Holdings Ii L.l.c. | 10 percent owner | C/O THE CARLYLE GROUP L.P., 1001 PENNSYLVANIA AVENUE, NW, WASHINGTON DC 20004-2505 |
Carlyle Holdings Ii Gp L.l.c. | 10 percent owner | C/O THE CARLYLE GROUP L.P., 1001 PENNSYLVANIA AVENUE, NW, WASHINGTON DC 20004-2505 |
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